Meesho Bets on Advertising and Lending as Logistics Gains Land

Meesho is shifting its focus from adding users to earning more from them. After years of building scale in India's value commerce market, the company is pointing to advertising as its main new revenue lever, with lending, Meesho Mall and content commerce following behind.

The base is large. In the second quarter of FY27, Meesho had 284 million annual transacting users, up 21% year on year, and 1.13 million annual transacting sellers, up 60%. Placed orders rose 17% to 819 million. Revenue from operations climbed 34% to ₹4,119.9 crore, while net merchandise value (NMV) grew 23% to ₹12,911 crore.

Margins improve, with a caveat

Contribution margin reached 6% of NMV, against 4.6% in the previous quarter and 3.3% a year earlier. The marketplace adjusted EBITDA loss narrowed to ₹130.5 crore from ₹371 crore in Q2 FY26. Management said the gain came mainly from logistics efficiencies, not from advertising, and warned that 6% should not be seen as the new normal because some savings may be passed on to consumers and sellers.

Advertising first

Meesho expects advertising to become a more meaningful part of its revenue mix, as a share of NMV, from FY28. Sponsored listings let sellers pay for visibility without Meesho taking on inventory. Motilal Oswal expects higher ad monetisation to support margin expansion from FY28, citing seller demand.

The risks are clear. An ecommerce analyst noted that user numbers alone do not set ad earnings: sellers must spend consistently and see measurable returns. Larger sellers may outbid smaller ones, and ad costs could feed into product prices, which would undermine the affordability that defines the platform.

Lending and brands

Management confirmed it is building lending products for both consumers and sellers, expanding its NBFC partner network and exploring work with banks. It has not disclosed assets under management, revenue targets or expected financial contribution, so the business remains early-stage. Meesho Mall and content-led discovery are further routes to deeper engagement, though their financial impact is also small for now.

The test for investors is how much advertising revenue Meesho keeps as incremental contribution once serving costs are counted, and whether it can do so without eroding low prices.