Daybreak Meesho’s success story is written in cash but investors now see risk
Oct 22, 2025
Meesho is gearing up for a high-profile IPO, built on a cash-first model thriving in small-town India. Over 75% of its orders are still cash on delivery, fostering trust but tying up cash flows. As investor concerns rise, Meesho collaborates with Razorpay to shift towards prepaid payments. They aim to enhance user experience and offer incentives for digital adoption. The challenge remains: can they convince loyal cash-clients to embrace digital solutions without losing their trust?
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Cash Built Meesho's Trust Engine
- Meesho built credibility in small-town India by leaning into cash-on-delivery rather than eliminating it.
- That strategy converted hesitant shoppers into millions of first-time online customers by matching local trust dynamics.
Small-Town Shopping Habits
- In towns like Kanpur and Rajkot, users often share smartphones and treat online orders as a cautious leap of faith.
- Meesho's social-commerce roots and reseller networks amplified local trust and accelerated adoption.
Cash Creates Operational Drag
- COD orders fail about one in four times, creating large operational waste and idle inventory.
- High COD share ties up working capital and reduces cash-flow visibility, worrying investors ahead of the IPO.