Industrial Analysis and Desk Research

Case Study on Zerodha

Submitted By: Tanmay Salunkhe

Varad Kulkarni

Roll Number: MBA23B116

MBA23B094

Batch: 2023-24

Summitted to: Prashant Dubey Sir

Zerodha: Disrupting the Indian Brokerage
Landscape

Introduction

Zerodha, founded by Nithin and Nikhil Kamath in 2010, emerged as a gamechanger in

the Indian capital markets. It disrupted the traditional brokerage landscape by offering
a user-friendly platform and addressing pain points faced by investors. Let's explore
how Zerodha's Blue Ocean Strategy propelled its success.

Strategies

1. Blue Ocean Strategy: Zerodha didn't invent the discount brokerage model; that credit goes
to the Charles Schwab Corporation in the US. However, Zerodha customized this successful
solution for the Indian market. By reducing transaction commissions and simplifying investing,
it attracted both existing investors and previously untapped buyer groups.

Customization: Zerodha recognized that Indian investors faced unique challenges. The existing
brokerage firms charged hefty commissions, making trading expensive. Zerodha's disruptive
move was to reduce brokerage fees to a flat rate, irrespective of the transaction size. This
resonated with investors who were tired of paying a percentage-based fee.
Technology Driven Approach: Zerodha leveraged technology to streamline processes. Its
online platform allowed investors to trade seamlessly, eliminating paperwork and delays. The
intuitive interface appealed to Tec savvy millennials.

2. Value Innovation: Zerodha's value proposition lay in catering to existing investors while
also reaching noncustomers—those who hesitated to enter the market due to complexity. It
offered an attractive alternative with lower commissions.

Educational Platforms: Zerodha launched educational initiatives like "Varsity," a

comprehensive guide to stock market basics. It demystified trading and investing, making them
accessible to a wider audience. By empowering potential investors, Zerodha created a loyal user
base.

Zero Brokerage on Equity Delivery: Zerodha's zero brokerage on equity delivery trades was a
bold move. It encouraged long-term investment and attracted retail investors who were wary of
high transaction costs.

Marketing Tactics

1. Educational Platforms: Zerodha's commitment to investor education set it apart. "Varsity"

provided free, high-quality content on topics ranging from technical analysis to risk
management. By empowering users with knowledge, Zerodha built trust and credibility.

2. User-friendly Interface: The platform's intuitive design and ease of use attracted
beginners. Zerodha's focus on simplicity resonated with Tec savvy millennials. The clutter free
dashboard allowed users to execute trades swiftly.

3. Word of Mouth: Satisfied users became brand advocates, spreading the word about
Zerodha's services. Positive reviews and referrals played a crucial role. Zerodha's community
forum allowed users to interact, share experiences, and seek advice.
Positive Response

Market Leadership: It commands 18.33% of the total active Indian clients. Its user base
surpasses that of traditional brokers.

Financial Performance: In 2020-2021, Zerodha reported a 2.6fold increase in net profit (Rs
1,122 crore) and a threefold increase in revenue (Rs 2,728 crore). The trend continued in 202122
with almost 60% YoY growth in both profits and revenues.

Conclusion

Zerodha's success lies in its ability to create value without disrupting the industry. By
customizing an existing model and addressing pain points, it carved a niche for itself. As new
challengers emerge, Zerodha must stay agile and continue its customer centric approach.

Questions

1. How did Zerodha adapt the discount brokerage model for the Indian market?

2. What role did educational platforms play in Zerodha's success?

3. How did Zerodha attract both existing investors and previously untapped buyer groups?

4. What impact did word-of-mouth marketing have on Zerodha's growth?

5. How can Zerodha maintain its competitive edge in the evolving financial landscape?

References

1. Forbesindia.com
2. Medium.com
3. Bigmarketing.com
4. Startuptalky.com