AI Powers a New Discovery Engine

Meesho's shift to an AI-first model is transforming how users shop by prioritizing AI-driven discovery over traditional search. More than 70% of its code is now AI-generated, speeding up platform development. User interaction has fundamentally changed, with over 75% of orders now coming from personalized feeds powered by its AI engine, PRISM. This system anticipates user needs.

Meesho has also built specialized AI tools: Vaani helps onboard new internet users, GeoIndia LLM offers advanced location intelligence for India, and TrustMesh blocked 9 million high-risk transactions in FY26. These tools show a focus on India-specific AI for local users and conditions.

AI Boosts Financial Performance

This AI integration is driving strong financial results. In Q4 FY26, Net Merchandise Value (NMV) rose 43% year-on-year to ₹11,371 crore, with orders also up 43% to 717 million. Annual Transacting Users (ATUs) increased 33% to 264 million by FY26.

For the full fiscal year 2026, revenue grew 35% to ₹12,626 crore. The consolidated net loss narrowed significantly by 88% to ₹1,358 crore compared to the prior year. These improvements, aided by operating leverage, show AI efficiencies are boosting user experience and unit economics, aligning with AI's role in driving Indian market innovation.

AI Race Intensifies in E-commerce

Meesho faces a fast-moving Indian e-commerce market where AI adoption is growing quickly. Competitors like Flipkart are embedding AI across their operations, from product development to customer service, using large language models. Amazon India introduced an AI Store with tools like the Rufus shopping assistant and Lens AI for visual search. Myntra has experimented with AR virtual try-ons. This indicates a broad trend towards AI-enhanced shopping experiences.

The Indian e-commerce market is expected to reach $250 billion by 2030, with AI projected to boost profits through efficiency gains. India's AI startups are also attracting significant venture capital.

Skepticism Around AI Monetization

Despite strong short-term results, questions remain about Meesho's AI strategy. The company's IPO in late 2025 followed a valuation reset, suggesting pressure to meet public market expectations. While AI adoption is strong, proving its long-term monetization and competitive advantage needs ongoing validation.

Competitors are investing heavily in AI, creating a competitive field where AI advantages could become standard. Relying on AI for core tasks like code generation and discovery, while efficient, may also limit in-house innovation in algorithm design if not handled carefully. India's market complexity, with varied languages and local conditions, demands constant adaptation. Scaling tools like GeoIndia LLM against global tech giants presents a challenge. The growing availability of foundational AI models could also reduce the distinctiveness of AI-focused startups over time.

Meesho's AI Vision for Indian Markets

Meesho's AI-first approach is set to benefit from India's growing digital economy. Its focus on developing AI infrastructure specifically for India and customizing experiences for local language users is a key strength. As AI becomes more central to global e-commerce, Meesho's skill in turning AI insights into personalized, intuitive shopping journeys will be vital.

The company aims to expand commerce access for underserved users with AI, a vision that matches market trends expecting AI to improve customer interaction, streamline operations, and drive growth. Platforms that offer highly personalized and efficient shopping experiences are likely to lead future market expansion.