Lecture Notes on Misho and the E-commerce Revolution in India

Introduction to Misho

Misho is a revolutionary startup in India that has redefined e-commerce.
Millions of small sellers are now able to ship products across India.
Example: A seller from Rajasthan shipping to Kashmir and a retailer from Maharashtra shipping to Kanyakumari.
While competitors like Amazon and Flipkart burn cash, Misho has achieved profitability.

Misho has become a billion-dollar company.
Over 60% of Misho's products are cheaper than competitors.
The average order value (AOV) on Misho is around 360-370 rupees, compared to 1000 rupees for Amazon and Flipkart.
Misho's active users grew by 32% year-on-year as of December 2023, compared to 13% and 21% growth for Amazon and Flipkart respectively.
Customer retention rate is as high as 80%.

The Indian e-commerce market is valued at $12.93 billion, expected to grow to $299 billion in 5 years (164% growth).
E-commerce only accounted for 8% of total retail sales in 2022, indicating significant growth potential.
Traditional e-commerce giants focused on Tier 1 cities, neglecting Tier 2 and Tier 3 cities.
60 million small and medium businesses contribute to 85% of the overall retail market, yet many were excluded from e-commerce due to cost and complexity.

High Commissions: Sellers on platforms like Flipkart and Amazon get only 60-70% of their selling price due to high fees.
Low Penetration: Tier 2 and Tier 3 cities lacked awareness and trust in e-commerce.
Long Payment Cycles: Sellers faced a 19-day wait to access funds after sales.

Founded in 2015 by Sanjeev and Vidit to empower small sellers and democratize internet commerce.
Transitioned from a B2B2C model to a B2C model, allowing customers to buy directly from sellers.
Zero Commission Model: Misho charges a small fulfillment fee, allowing sellers to keep more revenue.

Misho generates revenue through performance advertising for sellers.
Sellers can choose advertising budgets, targeting specific customers to boost sales.
Advertising models include:
- CPV: Cost per view
- CPC: Cost per click
- CPA: Cost per action
- CPM: Cost per thousand impressions

Misho provides a supplier panel with features like price recommendations and inventory management tools.
55% of sellers on Misho are manufacturers.

Zero Commission: Enables sellers to offer lower prices to customers.
Faster Payment Cycle: Reduced to 7 days, improving seller cash flow and reducing reliance on loans.
No Private Labels: Unlike competitors, Misho does not compete with its own sellers.
Asset-Light Model: Operates primarily as a marketplace, avoiding heavy investments in inventory.
Equal Treatment for Sellers: No seller tiering, allowing all sellers equal opportunities.
Reduced Logistics Costs: Achieved through high shipment volumes and outsourcing logistics.

Misho addresses issues of product quality, returns, and refunds through technology and strategies like barcoded packaging.
High return success rate of 96% with quick refund processing times.

Find Your Blue Ocean: Identify untapped markets like Tier 2 and Tier 3 cities.
Leverage Neglected Potential: Recognize the vast opportunities in smaller markets.
Focus on Empowerment: Support small sellers rather than competing against them.

Misho's unique business model and focus on small sellers have allowed it to thrive amidst competition from larger e-commerce platforms.
This case study serves as a valuable insight into building a successful business in a competitive landscape.

For more insights, refer to Misho's Trust Assurance report and related resources.