“We will never add any hidden fees at the cart level, convenience fee, platform fee, many other fees that a lot of platforms add,” Meesho co-founder and Chief Executive Officer (CEO) Vidit Aatrey said on the company’s earnings call for the September quarter of financial year 2026-27 (Q2 FY27).

Meesho will instead rely on cheaper logistics and advertising to improve its earnings, while handing more of its engineering work to artificial intelligence (AI) agents. “In Q2, agents became the default way we build software,” the company said in its shareholder letter.

Here are the key takeaways.

1. No platform fees, even though Meesho loses Rs 2.4 per order

“If we have to charge higher, we would increase our take rate on logistics or ads or something else, but we would not add a platform fee,” Aatrey said.

An analyst pointed out that Meesho loses about Rs 2.4 on every delivered order and asked why it does not add a Rs 1 or Rs 2 fee at checkout.

“Putting anything at the cart level that is not exposed earlier sometimes also leads to loss of trust with that customer,” Aatrey said. “We may let go of some short-term revenue around it, but increased customer trust would lead to much higher LTV in the long run.” He was referring to lifetime value (LTV), or how much a customer spends on a platform over time.

Zomato and Swiggy take the opposite approach. They charge Rs 14.90 and Rs 17.58 per order, respectively, after both raised their platform fees in March.

2. AI cuts delivery costs, but chip bills are rising

“This is sort of a global phenomenon right now, where GPU pricing has suddenly overshot significantly,” Chief Financial Officer Dhiresh Bansal said, referring to graphics processing units (GPUs), the chips that run AI models.

Meesho uses AI to cut delivery costs:

  • Geo-India LLM: This large language model (LLM) fixes customer addresses. It improves “address accuracy, hence making it easier to find the end users,” Bansal said. The letter said it helped make deliveries about 15% faster year-on-year.
  • TrustMesh: This AI model “continues to get better at stopping potentially fraudulent orders before they are placed, so fewer shipments end up cancelled or returned to origin,” the letter said.

AI has also raised costs. Meesho “secured compute capacity early, increasing our GPU footprint by 150%” ahead of the festive sale, the letter said. Server costs rose to 2.3% of net merchandise value (NMV), from 1.9%. NMV is the value of orders actually delivered.

The AI models that rank Meesho’s shopping feed also add to the bill. “If we start using more compute-intensive algorithms to make sure that the relevance of the feed remains high, then those kind of lead to larger usage of server costs,” Bansal said.

Meesho plans to cut these costs. “Many can move to cheaper or open-weight models today,” the letter said, referring to Meesho’s AI workflows. Open-weight models are AI models whose underlying parameters are freely available to download and run. “In the near term, server and software costs may remain above earlier levels as a share of NMV until these optimisations take effect,” it added.

3. Cheaper logistics and ads lifted margins, and the savings go into lower prices

“You should expect us to keep reducing the cost of logistics every quarter forever, irrespective of any time,” Aatrey said. “Inflationary time, non-inflationary time, we will continue to do it.”

Meesho’s contribution margin rose to 6% of NMV, from 4.6% in the previous quarter. Contribution margin is what Meesho earns per order after delivery and other direct costs.

  • Logistics: Bansal said the improvement was “largely led by logistics.” He credited fewer returned orders, more orders on each route and “the network redesign.”
  • Ads: The letter also credited advertising, saying that “more sellers invested in ads that reliably convert into orders.”

“We may not hold Contribution Margin at this level in the near term,” the letter said. Meesho will pass much of its savings back to buyers and sellers. “Whenever we reduce our pricing, products and categories that were unviable last year or last month start to become viable,” Aatrey said.

4. Meesho is moving into lending

“We have essentially both seller and consumer side lending products there, and both are showing good signs,” Bansal said. Meesho works with non-bank lenders, and “increasingly, we’re looking at getting bank partners as well,” he added.

On October 28, Meesho’s board approved an investment of up to Rs 400 crore in its payments arm and a new unit to underwrite loans itself.

Lending is one of Meesho’s new businesses, along with grocery and AI services, which it calls Horizon 2 (H2) bets. Together, these businesses lost Rs 41.6 crore this quarter, and “total H2 spend has a hard cap,” the letter said. Bansal put the cap at “about INR 200 crores annual cap, including all of the initiatives that we have.” This includes Kirana Club, a platform for neighbourhood grocery stores. Bansal said the acquisition had closed “as recent as today.”

5. Delivery partners will pay for automation

“So far, it does not look like the majority of CapEx investments here will come from us,” Aatrey said, referring to capital expenditure (CapEx).

Meesho is automating sorting hubs in Valmo, its own delivery network. The entrepreneurs who run those hubs are paying for much of the investment. “All the Valmo entrepreneurs who are part of the network, small or big, depending on the size of their node, they think of this as a large opportunity to grow their business,” Aatrey said.

Meesho has also stopped disclosing what share of its orders Valmo delivers. “As a principle, we don’t specifically want to comment on how much is Valmo share versus how much is 3PL share, given its sensitivity to a lot of other players, too,” Bansal said, referring to third-party logistics (3PL) companies. Last quarter, Valmo’s share had held at about 50% for three consecutive quarters.

6. Shoppers keep coming, but budgets are tight

“From whatever data we have seen on the user behavior, we do not see any concern yet,” Aatrey said.

  • Demand: “On demand-side traffic, we hit all-time high numbers across the board,” Aatrey said. Meesho’s annual buyers grew 21% to 284 million.
  • Caution: The letter was more guarded. “The geopolitical conflict has lasted longer than most expected, leading to a surge in raw material and fuel prices, and household budgets remain under pressure,” it said.
  • Sellers: “We see a lot of pain point on the seller side,” Aatrey said, as crude oil price fluctuations have disrupted sellers’ supply chains.

7. One engineer now does the work of a three-person team

“One engineer steering a fleet of agents now owns the outcome that a three-person pod owned before,” Meesho said in the letter.

“AI agents now write code, tests and documentation, while engineers write the specification, review the result and own the outcome,” the letter said. Meesho uses four types of agents:

  • AI engineer: “65% of pods now run by a single engineer directing agents.”
  • AI code reviewer: “Time to approve a change down 41%, despite 3x more changes to review.”
  • AI data science researcher: “Time to take a model to a live test cut from 17 days to 3.”
  • AI security analyst: “Threats detected in under 10 minutes.”

“Engineering output, measured by our internal productivity score, rose 171% between March and September 2026,” the letter said. “Features now ship in days rather than two to three weeks.”

Meesho expects this to slow the growth of its costs. “As single-engineer pods become standard and agents take on more coding, support and operations, we expect product velocity to keep improving, with costs growing more slowly over time,” the letter said. It did not say how this would affect hiring.

8. Shoppers are moving beyond essentials

  • Meesho Mall: Sales on Meesho’s section for branded products grew 81%, across about 1,800 brands. Customers who started with essentials “are also buying face serums, sunscreens, conditioners and face rollers,” the letter said.
  • Creator videos: Sales driven by creators’ product videos grew 160%. Customers “watch someone they trust use a product, then buy it,” the letter said.

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