India’s Economic Growth Clashes with Outdated Supply Chain: Meesho Steps In
Despite India’s rapid economic expansion, its supply chain infrastructure remains stuck in the past, reminiscent of decades-old practices. The logistics industry is fragmented, dominated by numerous small, regional operators lacking efficiency and scalability. Truckers still rely heavily on traditional methods like brokers and word-of-mouth to secure cargo, exacerbating delays, particularly in urban manufacturing centers grappling with severe truck shortages.
This antiquated system poses significant challenges for India’s burgeoning e-commerce sector and its stakeholders. Meesho, supported by heavyweights like Prosus Ventures, Fidelity, SoftBank, and Peak XV, aims to address these gaps in the country’s supply chain.
The Bangalore-based startup unveiled Valmo (short for value movement) on Wednesday, a network designed to unite logistics platforms, technology partners, and small entrepreneurs running sorting centers to streamline the delivery process. Meesho’s strategy revolves around leveraging micro-entrepreneurs, tapping into their deep understanding of local communities and their potential to absorb additional responsibilities. The Valmo network positions delivery partners closer to end-users, reducing delivery times and providing full visibility into parcel journeys, thus enhancing the overall customer experience.
Valmo making inroads. Image Credits: Meesho
“Valmo represents a concerted effort to integrate smaller players into the broader e-commerce ecosystem,” explained Sourabh Pandey, CXO of Fulfilment & Experience at Meesho, during an interview. Currently, these smaller players account for only about 20% of e-commerce deliveries. “With Valmo as a network, we believe we can increase that share to 45%,” Pandey added.
Meesho is challenging the conventional logistics model, where operators utilize large boxes and bulk volume to reduce overall costs. “We advocate for the opposite approach,” Pandey emphasized. “We aim to establish a more plug-and-play network that can scale capacity as needed, offering a lower-cost operating model. Even when there’s substantial volume moving out of a city to multiple destinations, we route them through various disaggregated nodes.”
Valmo offers mutual benefits for all participants within the ecosystem. Micro-entrepreneurs gain access to more work opportunities, while the network generates increased demand for delivery players. By leveraging unused bandwidth, Meesho can reduce delivery costs, benefiting both buyers and sellers.
Pandey revealed that the startup initiated the project’s pilot phase last year, and Valmo is now operational in 20 states across India, facilitating over 800,000 orders daily. Currently, Valmo is exclusively used by sellers to process Meesho orders.
Meesho does not view Valmo as a means to eliminate its reliance on existing logistics players such as Delhivery, Shadowfax, XpressBees, and Ecom Express. Pandey expressed hope that many, if not all, of these players would participate in the new network.