E-commerce platform Meesho has managed to turn profitable after tax in July 2023. The company's CFO Dhiresh Bansal told Moneycontrol in an interview that lower customer acquisition costs, better monetisation efforts helped in achieving this milestone.
Also Read: Zomato Q1 results: Food delivery platform's revenue rises 70%, turns profitable for the first time
As per Moneycontrol, since the beginning of this year, Meesho has undertaken several measures to cut costs and better its financial health. In its second round of layoffs, it let go of 251 employees from the company’s core unit. Meesho had even brought down its cloud expenses by around 50%. All this may have propelled the Bengaluru-based startup further in the direction of profitability.
Bansal also mentioned that the performance is likely to remain same in the coming months however there are chances for FY24 to be marginally positive or negative. Moneycontrol's report also mentioned that Meesho’s PAT was a low single digit (Rs crore) in July even while Bansal did not comment on the specific numbers during the interview.
“FY24 might be marginally positive or negative. I don't know, I can't forecast with full accuracy. July is a 'business as usual' month because there's no festive season. We wanted to make sure we are profitable before entering the festive season around August when demand is higher…we expect to continue this sort of profitability,” Bansal told Moneycontrol.
Also Read: Meesho removes 52 lakh counterfeit products, blocks over 12,000 accounts
The main reason Bansal says for the profit is the reduction in Consumer Acquisition Cost (CAC).
“The largest efficiency has come from reducing our CACs by almost 70 percent. Two years ago, our CAC was roughly Rs 250, it has now come down to around Rs 50-60. Even as we reduce our market expenses, we have been getting a similar level of throughput,” Bansal said in the interview to Moneycontrol
The company's revenue also grew 54% while its order volumes registered a 43% increase, on a year-on-year (YoY) basis. Bansal has also said that the company is also looking to acquire companies that complement its business. If the move requires Meesho to raise money, it will be open to negotiations.