Zerodha- Business Case Study

Nithin Kamath and Nikhil Kamath founded Zerodha, the online discount brokerage company, in 2010. As time passed, Zerodha started challenging traditional brokerage firms and reframing the stock landscape. In this case study, I am going to share their business model, marketing strategy, and technology innovation.??

Business Model

In the 2008 crisis, they were looking for some funding but didn’t get it. Unfortunately, they have to start with their own money. Due to this, they don’t have any money to get wasted. Founders started by studying the market deeply and found the pain points, listing them as:

1. Trading was done both online and offline
2. Charges were very high at both points buying and selling
3. Hidden charges?

Other companies were opening demant accounts for free to acquire the customers which needed funds. In contrast, Zerodha charged Rs200 for account opening and Rs 300 for annual maintenance which separated them from traditional firms. There was a lack of transparency, hidden and high charges on transactions, Zerodha charged a fixed amount of 20 INR per trade instead of a percentage-based commission. These changes led to customer acquisition.

Zerodha is always dedicated to helping investors. After noticing a lack of knowledge about investing, it started Varsity, which provides free resources related to trading and investment to educate investors. It also launched its new platform, Coin, a direct mutual fund for long-term investors without extra charges.?

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Technological Innovations

While others were doing both online and offline, they became completely online after technology integration, Offering a range of advanced trading tools. The platform, Kite, provides traders with access to advanced features and real-time market data, ensuring they can make informed decisions with the latest stock prices, market depth, and order books.

For traders it became easy to move, Kite Mobile offers a seamless experience on Android and iOS devices, allowing users to track markets and execute trades from anywhere with ease.

Marketing Strategy

Zerodha never spend money on marketing, success has been largely driven by word-of-mouth referrals and organic growth, thanks to its reputation for low costs, robust technology, and superior customer service.

The company also positions itself as an industry leader through high-quality educational content. Their blogs, videos, and webinars not only attract a large audience but also help customers develop deeper financial knowledge, fostering trust and loyalty.

Currently, Zerodha has grown its profit by 62% in FY24 and revenue by 21%. As they always did technical innovation, being customer-centric and accessible pricing has redefined the brokerage industry in India.