How Meesho's secret weapon disrupted an entire industry.

What started as an internal logistics decision ended with a fire sale, a crushed IPO, and a reshaped ecosystem.

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What's the story?

I always thought logistics was a boring industry where nothing ever happens. You know, packages go from point A to point B, companies make money, rinse and repeat. Until very recently, I read 3 very different articles which made me rethink the foundations of business ecosystems.

Sometimes, one company's strategic move can trigger a domino effect across an entire industry. That's exactly what happened when Meesho launched its in-house logistics arm, Valmo, setting off a chain reaction that reshaped India's logistics landscape.

The Setup

For years, e-commerce companies in India relied heavily on third-party logistics providers (3PLs) like Ecom Express, Delhivery, and others. These companies were the invisible backbone of online shopping, ensuring your orders reached your doorstep. Meesho, like most e-commerce players, was no different, it outsourced its deliveries to these logistics partners.

But in February 2024, Meesho decided to change the game entirely.

Enter Valmo

Meesho officially launched Valmo, its own logistics platform, with a bold vision: to handle a significant portion of its deliveries in-house. The results were dramatic. By December 2024, Valmo was handling a whopping 50% of Meesho's orders. This wasn't just about efficiency; it was about control, cost reduction, and strategic independence.

The numbers tell the story.

Valmo scaled from 0 to 9 lakh daily orders in just 12 months

Covers 15,000+ pincodes across India

Created 85,000 jobs in logistics and delivery

Handles 50% of Meesho's orders internally

The Domino Effect

But here's where it gets interesting. When a major client like Meesho decides to bring logistics in-house, it doesn't just affect their own operations, it sends shockwaves through the entire ecosystem.

Ecom Express, one of India's prominent logistics companies, found itself in a particularly vulnerable position. Here's the shocking part: Meesho contributed nearly half of Ecom Express's revenues, over 50% of its shipment numbers. This wasn't just a big client; this was “THE” client that the company's entire business model depended on.

The company had been preparing for a grand IPO worth approximately Rs 2,600 crore, having even received regulatory approval. But when your biggest revenue source decides to take their business elsewhere, the math changes quickly. Ecom Express saw its revenue increase by a mere 2.3% to Rs 2,653 crore in FY24, the slowest growth among competitors, as the Meesho impact began to bite.

The Fire Sale

What happened next was a classic case of how quickly fortunes can change in the startup world. Instead of going public at a Rs 2,600 crore valuation, Ecom Express ended up being acquired by Delhivery for just Rs 1,407 crore, nearly half of its IPO aspirations. The fire sale was swift and decisive.

To put this in perspective: losing Meesho wasn't just about losing one client, it was about losing the foundation of their entire revenue model. It illustrates the hidden fragility in India's $63B logistics ecosystem. When your largest client becomes your competitor by building internal capabilities, you face the "platform risk paradox", 73% of Indian logistics companies depend on the top 3 clients for 60%+ revenue. Ecom's 50% Meesho dependency created a ₹1,250 crore revenue cliff when Valmo launched.

This wasn't just a missed opportunity; it was a fundamental shift in market dynamics. Delhivery, already a major player in logistics with Rs 2,378 crore in Q3 FY25 revenue and Rs 5,488 crore in cash reserves, became even more dominant by absorbing a key competitor. The acquisition essentially eliminated a significant player from the market overnight.

The Ripple Effect on Shiprocket

The consolidation didn't stop there. Shiprocket, another logistics unicorn that had been preparing for its own IPO (estimated at Rs 2,000-2,500 crore), suddenly found itself in a more challenging environment.

Shiprocket's business model revolves around providing multiple logistics options to e-commerce businesses, acting as an aggregator that gives merchants choice and flexibility. But when two major players like Delhivery and Ecom Express become one entity, and when companies like Meesho are building their own logistics capabilities, the competitive landscape shifts dramatically.

A consolidated market with fewer, larger players means less negotiating power for aggregators like Shiprocket (especially with Delhivery even going for a Shopify integration). It also means that the value proposition of "multiple options" becomes less compelling when there are fewer quality options available.

The Bigger Picture

This sequence of events illustrates a fascinating aspect of business strategy: how one company's move toward vertical integration can trigger industry-wide consolidation.

Meesho's decision to build Valmo wasn't made in isolation, it was a response to the growing importance of logistics in e-commerce profitability and customer experience. But by reducing its dependence on third-party providers, Meesho inadvertently weakened the very ecosystem it once relied upon.

For logistics companies, this created a "adapt or perish" moment. Some, like Ecom Express, chose acquisition as an exit strategy. Others, like Shiprocket, are doubling down on acquisitions,in-house options and technology to stay competitive.

What's Next?

The logistics sector in India is now more consolidated than ever, with Delhivery emerging as a clear dominant player. For e-commerce companies, this might mean less choice but potentially more standardized service quality.

For Meesho, Valmo represents more than just cost savings, it's a moat. By controlling its own logistics, the company has reduced its dependence on external partners and gained greater control over customer experience.

But there's an irony here: Meesho's move toward independence has made the overall market more concentrated, potentially giving the remaining logistics giants more power over other e-commerce players who haven't built their own delivery networks.

The Bottom Line

The story of Valmo, Ecom Express, and Shiprocket is a masterclass in how interconnected modern business ecosystems really are. One company's strategic decision to bring operations in-house didn't just affect its own business, it’s reshaping an entire industry.

As more companies consider vertical integration, we might see similar domino effects across other sectors. The question is: will this lead to a more efficient market, or will it create new monopolistic tendencies that stifle competition?

Only time will tell, but one thing is clear, in the world of business strategy, every move matters, and sometimes the biggest disruptions come not from new players entering the game, but from existing players changing the rules entirely.

When your platform’s success depends on one client, you're not building a business - you're building a dependency

Oh, and by the way, Meesho is now the second biggest e-commerce player in India after Amazon, processing 27 lakh orders a day. I'll dive deeper into how they pulled it off over the week. Stay tuned!

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