Under this, Meesho will aggregate several logistics providers and offer their services to its sellers. It will also provide the tech platform and other services like customer service, monitoring, and design, to ‘small entrepreneurs’ who will run logistics for Meesho.
Unlike logistics services run by other ecommerce firms such as Flipkart and Amazon, Ekart and Amazon Transportation, respectively, Meesho will not invest in assets like trucks and warehouses. It would instead rely on assets brought in by the logistics provider themselves.
These logistics providers will work across various levels of the supply chain — from first-mile pick-up from the seller and sorting and long-distance hauling to last-mile delivery to customers, the firm said.
The firm is passing on almost the entirety of the seller fees for the delivery to the logistics provider under Valmo, said Sourabh Pandey, chief experience officer, fulfillment and experience at Meesho. It will charge under a rupee per order for its services, he added.
Valmo offers 5% lower logistic costs compared with third-party logistics players such as Delhivery, Xpressbees, Shadowfax, and Ecom Express that currently work with Meesho, Pandey said.
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When asked about whether Valmo was competing with these partners, Pandey said Meesho had reached out to these third-party partners to collaborate on Valmo. “We believe they also stand to benefit from this network, as some of their assets that lay idle can be used by our delivery entrepreneurs.”The firm has been scaling up Valmo for over a year and currently sees 20% of its total orders go through the service. Meesho intends to double this share in the next 12 months, Pandey said. Currently, the firm employs over 3,000 small businesses, besides 10-12 large firms in warehousing and sorting.
“Sorting requires a large upfront capital expenditure so we have to stick to large firms like Mahindra Logistics and Stellar Logistics. But for the first mile, last mile, and long haul, a lot of the teams are between 10 and 15 people in size… For instance, 80% of our trucking is done by entrepreneurs with a fleet of less than five trucks, employing about 10-12 people,” Pandey said.