Why Meesho and Budget Shopping Apps Are Dominating Tier-2 India

Here is a question: where is India e-commerce really growing? It is not Mumbai or Delhi. The real action is in Lucknow, Indore, Jaipur, Coimbatore, and thousands of smaller towns you have probably never heard of.

And the app they are using most? Not Amazon. Not Flipkart. It is Meesho.

The Rise of Hyper-Value Commerce

According to Bain & Company, hyper-value commerce platforms have grown from 5% of e-retail GMV in 2021 to over 12-15% in 2024.

What is hyper-value commerce? Simple. It is platforms that offer ultra-low price products. We are talking ₹99 kurtis, ₹199 shoes, ₹49 phone covers. Products so cheap that even Cash on Delivery fees feel expensive.

Why Tier-2 and Tier-3 Cities Love These Apps

Let me explain from real conversations I have had:

• Price is king - When your monthly budget is tight, ₹500 saved matters
• Variety they never had - Local shops have limited stock, online has everything
• Social proof - Friends and family already using these apps
• Regional language support - Apps work in Hindi, Tamil, Telugu, and more
• COD available - Trust issues with online payments still exist

The Meesho Model: Zero Commission Magic

Meesho cracked the code by doing things differently:

1. Zero commission for sellers - Small sellers can list products without fees
2. Seller financing - Help small businesses grow with capital
3. Direct factory connections - Cut middlemen, reduce prices
4. Social selling - Resellers share products on WhatsApp
5. Vernacular first - App works in local languages

This model attracted lakhs of small sellers who could never afford Amazon or Flipkart fees. And those sellers brought products at prices that shocked the market.

The Global Context: Temu Effect

What is happening in India mirrors a global trend. As noted by Reuters, Temu in the US grew from zero to 55-60 million monthly active users in just one year. Their GMV hit $14-16 billion by end of 2024.

India has its own version of this disruption happening through:

• Meesho - Leading the pack
• Shopsy by Flipkart - Walmart response
• Various D2C factories - Selling directly via WhatsApp

The Big Numbers You Should Know

According to IBEF:

• 60% of all online orders now come from Tier-2 and smaller cities
• By 2028, 85% of e-retail GMV will come from upper and upper-middle income households
• 60-70 million households are moving into higher income brackets by 2024
• Logistics costs have fallen 6% between 2020-2023

This means delivery to small towns is getting cheaper. And more people have money to spend online.

What This Means for Online Shopping

For consumers in smaller cities:

• More options than ever before
• Prices that match local budgets
• Products delivered to your doorstep
• No need to travel to big cities for shopping

For sellers:

• Access to crores of new customers
• Low barrier to entry
• Support for growing your business

The Catch: Quality Concerns

Let us be honest. Ultra-cheap products often mean:

• Lower quality materials
• Inconsistent sizing
• Higher return rates
• Limited customer service

But for many shoppers, getting 3 items at the price of 1 premium item is worth the trade-off.

My Verdict

Hyper-value commerce is not a fad. It is the future of Indian e-commerce. The country is too price-sensitive for premium-only models to dominate.

If you are in Tier-2 or Tier-3 India and have not tried Meesho yet, give it a shot. Just keep expectations realistic about quality.

What has been your experience with budget shopping apps? Share in the comments!

Sources: Bain & Company, IBEF, Reuters