Why is Zerodha Succeeding in such a Competitive Market ?

Zerodha is the biggest discount broker in India currently. The company was founded by brothers Nithin Kamath and Nikhil Kamath in 2010. It is headquartered in Bengaluru and has the biggest active client base currently. The company has gained a huge market share since its inception with zero advertising and has attracted the retail investors on the basis of its services offered.

It has various authorised brokers and a strong network which ensures its active clients suffer no problems for the daily trade schedule. The discount broker has been ahead of other companies like Upstox, Angel broking etc. based on the very strong model of value creation.

The company has been attracting customers regardless of its account opening fees and annual maintenance fees. In short Zerodha is providing the best features a discount broker can offer currently. But how does it stand out its competitors without incurring marketing campaigns ?

Zerodha

Zerodha posted its quarterly earnings recently wherein it reported a profit growth of 88% to 2094 Crore Rs in comparison to the 1122 Crore Rs of FY 21. If you compare the results of Zerodha to Upstox then Upstox incurred a loss. The reason behind the same is the ARPU difference between the companies and the net earnings in front of the companies. 

Zerodha has catered a loyal retail base based on its services that it provides to its users. Through access to a Zerodha account a user can get access to various applications of the Zerodha universe such as Sensibull, Streak, Varsity, Coin, pulse etc. It also gets you access to invest through Smallcase.

Hence Zerodha gives multiple app user support to ensure a smooth trading experience for the users. Whereas Other competitors miss out on provind all such services in a single application. 

Apart from this the most important feature that separates Zerodha from its competitors is the Nudge feature and the GTT access. 

Zerodha Special Usage

Under Nudge feature any user who is executing a trade gets a nudge about the action that he or she is doing. In other words they get a notification or a warning if anything is wrong with their trade or the company they are trading into is indulged in current affairs recently.

For example if a company is trading at a lower valuation on a daily basis and hitting lower circuits the Nudge feature will provide you information on why such a thing is happening and whether the company is facing any charges from SEBI or any other reasons. This is where the retail investors get their protection layer from taking a risky trade and avoid big blunders in their investment activity.

Apart from this a special feature that Zerodha introduced first was the GTT facility. The retailers did not get a choice to place the order at an executed price. However this can be done for the stock by placing an order but it expires when the trading session ends. However with GTT the order is valid for one year.

Now if a person takes such a trade position in one stock or two stocks he can analyse the same but for multiple stock positions it becomes a difficult task to manage all at the same time. WIth Zerodha one can continue to maintain such an order value for 1 year. The GTT feature enables the users to place 50 GTT orders at the same time which lasts for 1 year. Hence the retail investors get a direct trade position whenever their stocks hit the pricing as selected by them. 

Other Features

Nowadays the Kite application offers some new features like a basket wherein you can save your trades that you want to execute and in one basket you can save as much as 20 trades. Also there is a feature known as alerts. For a person who is a daily trader and has to analyse multiple positions it becomes difficult to track the pricing of every particular stock.

Hence with the alert feature the application sends you a notification when your set prices hit. For example if a person wants to get notified when the price of Dr. Reddy’s stocks hit 5000 Rs. He simply has to place an alert for the price and the app will notify you when the price is hit. 

Hence all such features distinguish Zerodha from the other applications and hence it has become a unicorn on a self valuation due to the innovation it brings for the traders associated with it.

The client base of Zerodha is loyal and active and hence the clients don’t hesitate on paying AMC or account opening charges for the experience they get by using the application. This is the reason why Zerodha stands out from the competition and is staging out the race without any marketing indulged for attracting new customers.