Globalization strategy for Meesho with respect to Shopee

Globalization strategy for Meesho

1. GLOBALIZATION
STRATEGY FOR
MEESHO
GROUP A-10
Vasu Mittal | PGPM-23-058
Rakshit Mehta | PGPM-23-040
Hemanshu Patil | PGPM-23-020
Asmita Singha Roy | PGPM-23-015
1

2. •Started as a social commerce company
in 2015.
•Today one of the largest e-commerce in
India challenging the likes of Flipkart and
Amazon.
•Lets anyone start their business and sell
on the platform without the hassle of
inventory, shipping and other
investments.
•Targeted both household, small and
medium sellers and resellers.
•FY 23 performance - losses reduced by
48% while operating revenue grew by
77% to Rs. 5735 Crore.
•Meesho's order volume grew by 43% year
on year and around 80% repeat
customers.
COMPANY BRIEF
•Largest e-commerce platform in Southeast
Asia.
•Launched by the Sea company in 2015 in
Singapore as a C2C company but grew to
support B2C as well.
•Currently operates in 11 countries (7 Asia and 4
South American)
•Focused on the regional market and offering a
tailored experience to the customers of the
region.
•Ranked the top e-commerce brand in YouGov’s
“Best Global Brands” and ranked fifth overall.
•FY 23 performance - EBITDA losses reduced by
87% with EBITDA profitable expected in 2nd half
of FY24.
•Shopee’s order volume grew to 10.52% to 8.2
Billion orders.
2

3. Human Resources: Abundant supply of labor in the
informal sector - tapped by empowering homemakers
and small entrepreneurs
Technological Infrastructure: High mobile and internet
penetration - 800 million internet subscribers, including
about 350 million in active transactions
Domestic Market Size: India’s large and growing
middle class creates a substantial market
Growth of E-commerce: US$ 300 billion by 2030
Logistics Providers: Delhivery, E com express, and
Blue dart are the major logistics providers which
ensure fast and secure delivery
Financial Services: Integration with digital payment
systems like UPI and mobile wallets provides faster
transactions for resellers and customers
Business Strategy: Social commerce and empowering
local entrepreneurs differentiates it from traditional e-
commerce platforms
Industry Rivalry: The closest competitor to meesho.com
are myntra.com, etsy.com and jiomart.com
Supportive E-commerce Policies: Initiatives
such as Digital India and Startup India promote
digital business and entrepreneurship
Investment in Technology: Government support
for enhancing internet connectivity and mobile
infrastructure, especially in rural areas
Economic Growth: Faster consumption growth,
economy is projected to become the world's
third-largest consumer market by 2026
Market Shifts and trends: Covid-19 has shifted
the customer preference to online shopping and
digitalization
PORTER’S DIAMOND MODEL FOR INDIA
3

4. BANGLADESH MEXICO THAILAND PHILIPPINES
Language - Bengali +
English
Social norms - Similar to
East India, Rich culture and
muslim dominated
Language - Spanish + other
regional languages + English
Social norms - personal
relationships, family oriented
and context communication
Language - Thai + English
Social norms - large
ecommerce shoppers,
appreciation for craftsmanship
Language - Fhilipino + English
Social Norms - hierarchical
structure, different social
classes
Improving Infrastructure,
Growing international
penetration at 18% Gaining
back trust on ecommerce
Developing infrastructure, high
internet penetration working on
favourable regulatory
environment
High ecommerce sales growth
supportive regulations for
ecommerce, high internet
penetration, Growing
ecommerce sector 11%
Fast growing ecommerce
sector but fragmented,
infrastructure issues due to
archipelagic nation
Immediate neighbour,
minimal challenges
Situated between North and
South America can work as
stepping stone
Well connected with Southeast
Asia, relatively closer
Good connectivity with Asia
but manageable routes
Lower middle class
population with prospect of
upper middle by 2031
cheap labour
upper middle class economy
but with vast disparities
Availability of skilled labour
high consumer spending,
strong retail market, upper
middle class economy
low middle class economy,
smaller economy as compared
to others
WHERE TO GO? - CAGE FRAMEWORK
CULTURE
GEOGRAPHIC
ECONOMIC
ADMINISTRATIVE

5. ECONOMIC FACTORS
Metric Figure
GDP Growth 3.4%
Inflation 4.7%
Unemployment 3.0%
Ease of Doing Business60/190
Metric Figure
Population 126.7 Million
Literacy Rate 95.4%
Dependency Ratio 52.5%
Life Expectancy 75.2 years
Urban Population 80.20%
A high literacy rate means the adoption of digital
literacy would be high and people would be
comfortable using the app for shopping and
listing their products. The dependence ratio is
balanced which suggests significant purchase
power and income.
DEMOGRAPHIC FACTORS
POLITICAL FACTORS INTERNATIONAL LEVEL
NATIONAL LEVEL
INDUSTRY LEVEL
COMPANY LEVEL
CULTURAL FACTORS
Mexico is a federal public with a stable political government. The
center left party MORENA has formed the government. The
government focuses on economic reforms which will help the
economy grow.
The government has launched few initiatives that will support new
companies entering the country such as financial inclusion initiatives
for digital payments, tax incentives, and enhanced logistics and
transportation development.
Mexico is a part of United States-Mexico-Canada
Agreement(USMCA) and the Comprehensive and Progressive
Agreement for Trans-Pacific Partnership(CPTPP), which helps them
to facilitate smoother trade and investment flows, making them a
attractive business destination.
The GDP growth rate of 3.4% suggests a robust
economic performance. The Inflation rate is also
moderate and a relatively lower showing stable
economic environment, while a ease of doing
business supports a suitable business climate.
•Mexico is one of the fastest growing Ecommerce market in the
world.
•It has the 16
th
largest Ecommerce market globally.
•It has the 2
nd
largest GDP in Latin America.
•Average e-commerce spending per user in Thailand is around
$580.
•Mexico has 63 million Ecommerce users.
•Mexico has the 2
nd
largest Ecommerce market in Latin America
and the Caribbean.
•Facebook is the most popular social commerce platform among
shoppers in Mexico.
•Mercado Libre and Amazon are leaders in Ecommerce.
•Around 5.9% of GDP is contributed by the Ecommerce industry.
•Mexico has an $32.58 billion Ecommerce market.
•Industry CAGR is expected around 20.7%.
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120
Power DistanceIndividualismMasculanity Uncertainity
Avoidance
Long term
orientation
Indulgence
IndiaThailand
MEXICO – Ecommerce IndustryWHERE TO GO? - EA FRAMEWORK
Mexico

6. THAILAND – Ecommerce Industry
ECONOMIC FACTORS
Metric Figure
GDP Growth 3.9%
Inflation 1.23%
Unemployment 0.86%
Ease of Doing Business21/190
Metric Figure
Population 70.08 Million
Literacy Rate 93.8%
Dependency Ratio 43.3%
Life Expectancy 78.72 years
Urban Population 52.20%
A high literacy rate means the adoption of digital
literacy would be high and people would be
comfortable using the app for shopping and
listing their products. The dependence ratio is
balanced which suggests significant purchase
power and income.
DEMOGRAPHIC FACTORS
POLITICAL FACTORS INTERNATIONAL LEVEL
NATIONAL LEVEL
INDUSTRY LEVEL
COMPANY LEVEL
CULTURAL FACTORS
Thailand is a constitutional monarchy with a parliamentary system.
The king is the head of the state, while the Prime minister is the
head of government. The current government is stable environment
for business.
The Thai government has enacted several laws and regulations to
facilitate business activities, such as the Foreign Business Act that
help in tax incentives, relocation incentives, etc. Moreover the 4.0
initiative by Thailand will help the tech-driven business model.
Thailand is a part of ASEAN (Association of Southeast Asian Nations)
which benefits Thailand from regional economical integration,
enhanced trade facilitation, and improved connectivity which helps
them for business growth and expansion.
The GDP growth rate of 3.9% suggests a robust
recovery driven private consumption and
tourism. The Inflation rate is also moderate and a
very low unemployment rate shows stable
economic environment, while a high ease of
doing business supports a suitable business
climate.
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34
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0
10
20
30
40
50
60
70
80
90
Power DistanceIndividualism Masculanity Uncertainity
Avoidance
Long term
orientation
Indulgence
IndiaThailand
•Thailand has the highest social commerce penetration in the
world.
•It has the 18
th
largest Ecommerce market globally.
•Average e-commerce spending per user in Thailand is around
$250.
•Share of online shopping compared to other online activities is
83.5%.
•Facebook is the most popular social commerce platform among
shoppers in Thailand.
•Lazada and Shopee are the market leaders.
•Around 6% of GDP is contributed by the Ecommerce industry.
•Thailand has an $31.5 billion Ecommerce market.
•Industry growth is around 6%.
WHERE TO GO? - EA FRAMEWORK

7. WHAT
1
A platform for small and
medium enterprises and
individual entrepreneurs
to target value conscious
customer
2
3
4
5
6
HOW
Wholly owned subsidiary
that can partner with local
logistics companies for
facilitating timely delivery
WHERE
MEXICO - with a large upper
middle class population and
growing ecommerce. Target
major cities like Mexico City,
Tijuana, Guadalajara, and
Monterrey.
ORGANISATION
STRUCTURE
The organization structure should
cater to the main functions -
platform management, logistics,
marketing, suppliers onboarding,
finance and payments
FINANCE
Support from its major
investors which include
SoftBank, Peak XV, Fidelity
Investments, Prosus &
Naspers, and Meta
PEOPLE
Hire local talent as ample
availability of skilled labour
from universities, training can
be provided by the parent
company to ensure culture
and values alignment
WHERE TO GO? - 6-DIMENSION FRAMEWORK
7

8. HOW? - MODES OF ENTRY
Being a platform based service company, Meesho could
set up a wholly owned subsidiary that can handle the
operations side of it.
This includes customer support, suppliers registration
and onboarding, marketing, finance and logistics
support. The last function could be more of support as
for the actual transportation and shipping function, it
can partner with some local companies who are well
versed with the supply chain in the country and have
better available resources like locations, vehicles, etc
8

9. GLOBAL VALUE CREATION - AAA FRAMEWORK
Variation - Meesho should include products that cater to
local taste. Sourcing and listing local Mexican crafts and
artisan products that are unique to the region, aligning with
local tastes
Focus: Specialize in categories that are popular and have
logistical ease within Mexico. Such as local fashion and
beauty products. Helps minimize supply chain complexities.
Externalization: Partner with established Mexican e-
commerce logistics companies. For eg Estafeta or Redpack
to handle distribution and deliveries. Leverage local
expertise & infrastructure.
Design: Have flexible payment options that cater to the
Mexican market. Cash on delivery (still popular), and local
online payment methods like OXXO Pay, which are trusted
by Mexican consumers.
Innovation: Have a feature for live selling sessions on social
media platforms, a growing trend in Mexico, where sellers
can engage directly with customers and showcase products
in real-time
Centralized Operations: Establish a central
warehouse in a strategically located area like
Guadalajara, which is known for its robust
logistics and distribution network.
Standardization: Maintain a uniform platform
interface that can support both Spanish and
English, catering to both local users and potential
customers from the broader American market.
This helps in maintaining operational consistency
while allowing for regional customization.
ADAPTATION AGGREGATION
9

10. GLOBAL STRATEGY OF SHOPEE
Future growth strategies may involve:
•Market Expansion to new countries and regions within Southeast Asia and beyond.
•Diversification into new product categories and services beyond traditional e-commerce.
•Enhanced Seller Support which offers better tools and support to sellers for improving their online businesses.
•Digital Wallet Expansion for growing its financial services and digital wallet offerings.
•Marketplace Revenue Model: Sellers on the platform are charged both commission and transaction fees for every sale they make.
•Platform Features: Features like Shopee Guarantee enhances buyer security, a newsfeed, hashtag-based product searches, and a
buyer-seller chat function create a user-friendly shopping experience.
•Distribution Service: Shopee invested in Fulfilled by Shopee (FBS), a distribution service that allows sellers to store and ship
products through the platform. FBS fees are determined by the size and weight of the items.
•International Expansion: The platform's success led to its expansion into Chile, Mexico, Colombia, and Brazil, establishing Shopee
as a dominant eCommerce player in the Southeast Asia region.
•Business Expansion: Expansion of its services beyond eCommerce including food delivery, thus diversifying its revenue streams.
•Key Success Factors: Shopee's success can be attributed to its user-friendly features, secure payment services, and strategic
market expansions.
10

11. ASPECT MEESHO SHOPEE
Growth Strategy
-Initial setup and pilot testing
-Increase awareness and penetrate market
-Scale operations
-Solidify market position
-Focus on sustainability and leadership
-Market expansion to new countries
-Diversification into new product
categories and services
-Enhanced seller support
-Digital wallet expansion
Market Entry
Establish wholly-owned subsidiaries; partner
with local logistics companies
Expanding geographical reach and
enhancing services beyond e-commerce
Operational Strategy
-Centralized operations with a central
warehouse
-Uniform platform interface supporting local
languages and preferences
- Investment in Fulfilled by Shopee (FBS) for
streamlined logistics
Revenue Model
Focus on empowering local entrepreneurs;
generate revenue through commission and
transaction fees
Commission and transaction fees for
sellers, plus expanded digital wallet
services
Technological
Infrastructure
High mobile and internet penetration;
integration with digital payment systems like
UPI and mobile wallets
Developing and expanding digital wallet
offerings like ShopeePay
GLOBAL STRATEGY COMPARISON
11

12. WHAT DO WE RECOMMEND ?
Year 1:
Initial Setup & Pilot
Testing. Establish a
base market.
Actions:
•Conduct pilot tests
in Mexico City,
Guadalajara, and
Monterrey.
•Partner with
Estafeta/ Redpack
for logistics
•Implement OXXO
Pay and cash on
delivery.
KPIs:
Business registration,
platform launch, initial
feedback.
MEESHO'S 5-YEAR EXPANSION
PLAN FOR MEXICO
Year 2:
Increase awareness &
penetrate market.
Actions:
•Digital/Performance
marketing with local
influencers.
•Expand to Guadalajara
and Monterrey.
•Enhance local crafts
and artisan products.
KPIs:
User growth, regional
expansion, supplier
partnerships.
Year 3:
Scaling Operations.
Support growing
demand.
Actions:
•Optimize logistics,
reduce delivery
times.
•Implement data
analytics for
inventory.
•Strengthen
customer service.
KPIs:
Improved delivery times,
customer satisfaction,
operational efficiencies.
Year 4:
Solidify market
position.
Actions:
•Launch private label
products tailored to
Mexican tastes.
•Explore cross-
border e-
commerce
opportunities with
the U.S. and other
Latin American
countries.
KPIs:
Market share, private
label success, cross-
border expansion.
Year 5:
Sustainability and
Leadership
.
Actions:
•Implement green
logistics.
•Engage in community
initiatives.
•Optimize backend
operations
KPIs:
Invest in CSR &
Sustainability, improve
financial performance, look
for expansion avenues

13. THANK YOU
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14. REFERNCES
•https://www.statista.com/topics/871/online-shopping/#topicOverview
•https://www.commisceo-global.com/resources/country-guides/malaysia-guide
•https://www.mobiloud.com/blog/ecommerce -market-size-by-country
•https://thefinancialexpress.com.bd/home/can-bangladeshs-e-commerce-players-win-back-trust-1633408765
•https://www.thedailystar.net/news/bangladesh/development/news/bangladesh -has-capacity-become-upper-middle-
income-country-2031-iccb-3585001
•https://www.globalbusinessculture.com/cultural-awareness/what-you-need-to-know-about-business-culture-in-mexico/
•https://www.themintmagazine.com/mexicos-growing-e-commerce-infrastructure-is-built-on-top-of-its-smallest-shops/
•https://timesofindia.indiatimes.com/business/india-business/mexico-the-new-hub-for-indian-it-companies-
operations/articleshow/107037859.cms
•https://www.statista.com/statistics/266064/revenue-growth-in-e-commerce-for-selected-countries/
•https://www.researchgate.net/publication/285844787_Internationalization_Evolution_of_a_Concept
•https://www.fortuneindia.com/enterprise/social-commerce-the-meesho-way/105563
•https://startuptalky.com/meesho-marketing-strategy/
•https://forgefusion.io/meesho-case-study-business-model/
•https://startuptalky.com/meesho-success-story-2/#
•https://www.linkedin.com/pulse/aaa-framework-what-your-globalization-options-parshvi-gupta
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15. REFERNCES
•https://startuptalky.com/meesho-business-model/
•https://forgefusion.io/meesho-case-study-business-model/
•https://www.youtube.com/watch?v=tw8Zu_6ovbY
•https://entrackr.com/2023/12/meesho-reports-rs-5735-cr-revenue-in-fy23-losses-shrink-
48/#:~:text=Horizontal%20e%2Dcommerce%20platform%20Meesho,published%20on%20the%20company's%20bl
og.
•https://www.livemint.com/companies/news/flipkart-dominates-with-48-market-share-meesho-emerges-as-fastest-
growing-e-commerce-platform-report-11706246011226.html
•https://blog.remitly.com/finance/shopee/
•https://www.sea.com/products/shopee
•https://www.techinasia.com/sea-groups-q4
•https://cdn.sea.com/webmain/static/resource/seagroup/website/investornews/4Q2023/STWdlYqdqwmJntN4lrDk/2
024.03.04%20Sea%20Fourth%20Quarter%20and%20Full%20Year%202023%20Earnings%20Call%20Transcript.pdf
•https://www.businessofapps.com/data/shopee-statistics/
•https://www.hofstede-insights.com/country-comparison-tool
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