IPO-bound e-commerce platform Meesho has, for the first time, revealed that its in-house logistics arm, Valmo, now handles 50% of its daily orders. Over the past year, industry executives and analysts have said that Valmo's expansion has been impacting the margins and volumes of third-party logistics (TPL) providers like Delhivery and Ecom Express which used to transport all of Meesho’s parcels.
Currently, Valmo's services cover 15,000 pin codes, supported by a network of over 6,000 logistics partners. As per Meesho’s annual report, the company adjusted its losses by 97 per cent from Rs 1,569 crore to Rs 53 crore (excluding ESOP expenses). Additionally, its revenue from operations grew from Rs 57,345 million in FY23 to Rs 76,149 million in FY24.
Meesho’s CEO, Vidit Aatrey, stated in the company’s annual report that Valmo, its in-house logistics platform, operates on an asset-light model by using the unused capacity of its logistics partners. This allows Meesho to manage large order volumes while helping logistics partners make better use of their resources and increase their earnings.
Along with Valmo, the company also focuses on multiple third-party express parcel delivery providers. Meesho officially launched its logistics vertical, Valmo, on February 7, 2024. However, the platform had been operational prior to this formal announcement, managing over 900,000 daily orders across more than 20 states in India in May last year.
The company claims that India's logistics sector had many regional players serving limited geographies, leading to inefficiencies and underutilized capacity. This in turn led them to provide a reliable, cost-efficient logistics solution.
The company claims that it provides more than 110 million active listings daily. As of December 2024, 187 million consumers made transactions on its platform over the past year.
Meesho highlights that relying on its own logistics has helped cut the cost by 4-5% by working with local and regional delivery partners instead of only depending on big logistics companies.
However, the industry reactions to Meesho's logistics platform, Valmo, have been mixed among key players in the logistics sector. Speaking about the same, third party logistics provider Delhivery’s CEO Sahil Barua said on August 2 2024 in an analyst call that the company has “zero incentive" to unbundle its services to join Meesho's platform. He added, “It is also not in the interest of customers to disintermediate ourselves… The cost curve flattens quickly when you run a parcel-only network.”
He also highlighted that the company’s logistics model is already efficient, so there’s no advantage for them in joining Valmo, which aims to cut out middlemen to reduce costs.
However, third party logistics player Shiprocket is is exploring the possibility of integrating Valmo into its platform. In September 2024, Saahil Goel, CEO and co-founder of Shiprocket reportedly said, “Our approach is to bring any and every kind of model onto our platform.”
Meanwhile, brokerage firm Bernstein downgraded Delhivery and highlighted that Meesho’s Valmo is affecting it. “Delhivery is a volatile company. In some quarters, it has struggled with its PTL business, led by Spoton integration issues, and some due to weak Ecom business. Meesho's insourcing is now affecting it. This, coupled with senior management exits, suggests that the ship is still unstable,” the firm said in a note.
