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Fintech major Zerodha has touchedthe 1 crore customers mark, a milestone that CEO Nithin Kamath attributes to the use of Aadhar for opening online accounts.
In a social media post on August 26 evening, Kamath said, ”I can’t thank the Government and SEBI, and Exchanges & Depositories enough for making this happen.” He added a few more things that proved to be an unintended benefit for the company including Zerodha’s decision to rely on word-of-mouth for customer acquisition, among others.
Unexpected benefits
He noted that Zerodha’s plan to rely on word-of-mouth and having a single offering for all customers had benefits that the company never thought of at the start. Economies of scale kicked in not just in tech but across support and operations; the Zerodha team size has remained the same as it went from 20 lakh to 1 crore clients.
“When customers are introduced by family or friends who are existing clients, they also tend to help bridge the knowledge gap about the platform at the start. A huge challenge for consumer apps in a complex business like ours. Can’t thank our customers enough for this,” Kamath added.
Impact of fees
The online stock trading company started by charging account-opening fees to cover costs but soon realised that the fee also created a sense of seriousness. It pushed the idea that trading is risky and isn’t like installing a gaming app. Also, only those with intent opened accounts, reducing Zerodha’s compliance costs of inactive accounts.
“Don’t do unto others what you don’t want to be done unto you, has been at the core of everything we do. This meant no spam calls, emails or push notifications to open accounts or trigger trades. This also helped us gain credibility, the biggest challenge in broking business,” said Kamath.
In FY22 its revenues were ₹4,300 crore and profits at ₹1,800 crore. They also have invested in a portfolio of more than 20 companies through their Rainmatter Fintech platform.
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