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CityMall bucked the social commerce slump…or did it?

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Gaurav Tyagi

25 reads
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Gaurav Tyagi

25 reads

CityMall stuck to its guns even as many of its social commerce peers fled the space. But despite its revenue more than doubling in FY23, unhappy customers, irate community leaders, and a strange corporate structure raise questions about the true state of the business.

February 06, 2024

12 MINS READ

Key Takeaways

  • India has produced two social commerce unicorns—Meesho and DealShare—both exited the space in the past two years.
  • CityMall, however, has stuck to its model despite the social commerce exodus and even managed to more than double its revenue to Rs 336 crore in FY23.
  • Whilst the company appears to be gaining traction, though, things on the ground appear markedly less rosy. Consumers are unhappy and many community leaders are cutting ties with the company.
  • CityMall also appears to have an odd company structure, which obscures the true picture of the company’s current state.

When CityMall began its journey in 2019, India’s social commerce scene was already crowded. The likes of DealShare, Meesho, and Shop101 had already popularised the model in India, pointing to the success of such platforms in China as proof that social commerce could take e-commerce beyond India’s metros and truly unlock scale.

While CityMall wasn’t first to the race, its timing couldn’t have been more perfect. With the Covid-19 pandemic pushing retail online, social commerce plays became investor darlings. Investors poured north of $2.1 billion during the 2020-2022 boomtown, according to data intelligence platform Tracxn. Three years on from its inception, CityMall, too, was flush with funding. It had raised a total of $112 million from the likes of Accel, Elevation Capital, and General Catalyst, securing a valuation of $315 million in the process.

The glory days of social commerce, however, were now just a speck in the rearview mirror. Meesho, which became the first social commerce unicorn in 2021 after raising a $300 million round led by SoftBank, was in the process of ditching its social commerce roots altogether. In the year ended March 2022 (FY22), Meesho's topline grew to Rs 3,232 crore, resulting in a loss of Rs 3,251 crore. Realising it had no obvious path to profitability, it had transitioned to a vertically integrated e-commerce platform by mid-2022.

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