How Zerodha got 80% of retail investors trade to use online discount brokerage – in just 5 years
I am son of a Bank Manager and was introduced to trading very early in life through a friend. I started trading when I was 17 and saved up almost Rs. 5 lakhs trading the markets actively from 1998 to 2001, but lost it all in one day.
I joined a call center in Bangalore with the idea of putting back the trading capital. The working hours of call center gave me the opportunity to work during nights and trade daytime. In 2004, a NRI asked me to manage his portfolio after seeing my consistent performance for over 3 years. I quit my job and started Kamath Associate, an advisory business with my younger brother Nikhil. I also became a sub-broker for Reliance Money when they started off in 2006. During the free fall in the markets in 2008, I was on the right side of the trade and earned extraordinary returns, after which I decided to take it easy from trading for a while since I was feeling the fatigue of actively trading the markets. That is when Zerodha happened.
The main idea of starting Zerodha, was to be a broker that I personally never had and also the frustration that most of my earlier brokers had caused, slowly culminated in starting of Zerodha.
About Zerodha & Challenge faced
Zerodha is a brokerage firm, with memberships on all the stock, commodity, and currency exchanges in India. We were the first brokers in India to disrupt existing pricing structure by introducing a flat fee of Rs. 20 per trade model and zero brokerage on equity investments. Along with this, today we are also ahead of our competition in terms of technology and initiatives.
As a bootstrapped business, we started the business on a shoestring budget and also we have to work in a highly regulated environment. The real challenge though was convincing clients that just because we offer at low costs don’t mean we compromise on quality but we offer the best platforms at the lowest costs.
Growth of Zerodha
We have been growing at over 100% Year On Year (YOY) and have had a consistent Quarter on Quarter (QOQ) growth from the start of our business. Currently, we have more than 150,000 clients across the country with contributing 5% of daily retail trading volumes in various exchanges.
To grow the markets in India, there has to be innovation and disruption. To ensure this happens, we have started Rainmatter with the focus on building a new breed of highly innovative, user-centric software for personal finance and investments. We are creating a new wave in the Indian investmentTech space with our products, R&D, and funding for startups.
Our incubator is based in Bangalore that provides well equipped workspaces, mentorship, and funding to innovative technology startups. We have allocated a corpus of Rs. 35 crores for funding and till now we have invested in some interesting start-ups like smallcase.com, Tradelabs, Digio, with few others working with us in the stealth mode.
Our products & Initiatives
We are building a whole new world of trading using our next generation technology products and educational initiatives.
Listed below are few of our unique offerings.
A slick, full-fledged HTML5 trading platform with streaming market data, advanced charts, an elegant UI, and more.
Enjoy the Kite experience seamlessly on your Android and iOS devices.
Kite Connect API
We are commoditising and democratising investment technology with our “platform as a service” APIs. Build your own trading experience and trade with your favorite programming language with super simple, exchange-approved, HTTP/JSON APIs.
Complete trade and reporting console and dashboard.
A personal trading journal with insights on your best trading periods, most profitable streaks, optimal position sizes, contracts, and more, all intelligently compiled from your past trading behaviour.
Start investing in mutual funds in demat form with Zerodha. One account for everything.
Realtime trade updates from profitable traders. Pick and follow traders based on their trading style and verified profitability report. A great way to improve trading skills.
Pi is our desktop trading application built by Tradelab. Trading, charting, scripting, and analysis, all rolled into a Windows desktop trading platform.
Zerodha runs a very proactive online education initiative. We have three different offerings through which we actively interact with our audience. Although, the format of these offerings varies, they all are essentially working towards the same goal i.e. to enrich the audience’s knowledge on trading, investing, and markets in general.
Zerodha Varsity – This is a place where we have organized the most popular topics related to stock markets in one place. We refer to each main topic as a ‘Module’, and under each module there are several chapters. So for example ‘Fundamental Analysis’ is a module which has 16 chapters within it. So if you were to read these 16 chapters sequentially, then at the end of the 16th chapter you will be able to take insightful long term investment decisions in the markets. At the end of each chapter you can post queries related to the topic, and someone from our panel of experts will revert with an answer within 24hrs and thereby clearing your doubt. We have several modules like Technical Analysis, Option Trading, Futures Trading, Markets & Taxation, Commodities, Currencies, etc.
Zerodha Varsity is perhaps the most popular stock market education initiative which is freely available for all. One need not be a Zerodha client to access these contents. You just visit the site and start educating yourself. We clock close to about 25,000 page views per day with visitors from around 120 different countries.
Trading Q&A – Trading Q&A is a ‘question and answer’ forum. The forum has many registered members along with a panel of experts, and moderators constituting the forum. If you have a specific query related to markets and looking for an answer from the community then you can visit tradingqna.com and post your question, and the community in turn will start posting their answers based on their own experiences. We have over 8000 questions posted which have solicited over 13000 answers. Again this initiative is not restricted to Zerodha clients, it is free for all.
Z-Connect – Z Connect is Zerodha’s official blog, through which we impart knowledge and updates related to Zerodha. We even post and discuss important updates from the regulators and exchanges. If the number of comments for a post is an indicator for the popularity of the blog, then I won’t be surprised if Z-Connect is the most popular financial blog in the country, simply because we have over 500 (on average) comments for each of our posts.
Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of the publication