Ecommerce app Meesho says it’s profitable, but there are lingering questions

IN FOCUS

In today’s newsletter, we look at:

• The controversy over Meesho’s recent announcement of its first-ever profit
• Tokopedia’s march toward profitability
• Whether TikTok Shop should build its own in-house logistics arm

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Hi there,

The Indian Premier League (IPL), a yearly cricket tournament, has grown into a behemoth.

Media rights to the event are the world’s fourth highest​​ after the National Football League, English Premier League, and Major League Baseball.

I don’t play cricket, but I first found out about the IPL over a decade ago, when the law firm I worked for was representing a client embroiled in a dispute over the right to broadcast the tournament online.

Even back then, some of the characters involved seemed larger than life. The IPL has since gone from strength to strength. No surprises, then, that it has attracted sponsorships from top corporations – plus startups trying to build a name for themselves.

Brands including Byju’s, PharmEasy, Unacademy, and Meesho have sponsored the IPL. However, some have faced challenges afterward, leading to a joke in VC circles that being an IPL sponsor is an indication of a “troubled unicorn.”

In Meesho’s case, its losses in 2022 were US$392 million, up more than 6x from the previous year, which led it to drop out of the IPL sponsorship and lay off 15% of its workforce.

All that cost-cutting seems to have made an impact as earlier this month, Meesho’s founder boasted that it had become the first horizontal ecommerce company in India to turn a profit.

However, some investors have expressed concern due to a lack of transparency over Meesho not providing sales numbers for recent months, as is common practice.

My colleague Rachel explores these developments in this week’s Big Story.

Meanwhile, in the Hot Take, I look at the latest results posted by Indonesian tech major GoTo, and in particular, zoom in on its ecommerce business: Tokopedia.

— Simon

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