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Aiming long lasting relations

Plans to distribute over 1 million coupons per day in the next 12 months.

Tags: Freecharge.in, e-commerce, prepaid

BY Vrinda Oberai  |  April 16, 2012  |  comments ( 0 )  | 

Kunal Shah

A pioneer in establishing the couponing culture in India, Freecharge.in facilitates pre-paid recharges for all leading service providers – mobile, DTH and data card – under one roof, with a proposition that makes a recharge virtually free. With recent investments from Sequoia Capital, it is poised to grow further and be the leader in the segment.

Kunal Shah, Co-Founder and CEO of Accelyst Solutions Pvt Ltd (Freecharge.in is a business unit of Accelyst Solutions Pvt Ltd), shares his point of view on what sets his idea of doing business apart from the others and his plans in the industry further on.

Vrinda Oberai (VO): How did you cash in on a concept like Freecharge.in? What drove you there?

Kunal Shah (KS): We introduced the unique concept of Freehcharge.in after a lot of research and brainstorming about how we can add convenience and value to customers who wish to recharge their prepaid services like mobile phone, DTH and data cards. We found from our research that the mobile universe consists of 95 per cent prepaid users without any preferential treatments. We felt that this huge number presents a great potential, which has not been tapped by anyone so far. That is where we thought of creating value for our customers in a way that no one had done before, where customers not only get their recharge value for their prepaid service but also get free coupons of prominent retailers for the same value as that of their recharge.

We realised that every time a mobile service is used, there is an impact on the consumer wallet – be it Rs 18 per minute during the early days, when mobile services were initially launched, or the current 30 paise per minute. There is no running away from the fact that consumers have to pay for the call charges. Therefore the thought evolved – what could be the proposition that would make it ‘free’?

The magical word ‘free’ is also perceived as something that would have a caveat attached to it. On August 15, 2010, Freecharge.in was conceived with the idea to break this mould as well as to ensure that customers do get the value out of their recharges, which, in turn, would encourage repeat purchase behaviour and subsequently, more visitors.

VO: How have retailers benefited from the services offered by Freecharge.in?

KS: Freecharge.in is a great marketing platform for retailers to catch consumer eyeballs and have sustained brand recall value. The platform enables the brand to exhibit their special value offers to attract millions of consumers, who would, in turn, intentionally choose and opt for coupons with a thought of consuming the offer, hence increasing footfalls and generating revenues for the brand.

Freecharge.in partners with the best brands in the country today. We generate more than 10,000 footfalls per day at our partner stores. We engage with the retailers as partners to drive value at zero cost.

Freecharge.in launched with partners like McDonalds and CCD; today we have more than 50 partners and this number is growing with every passing day. Some of our esteemed partners/retailers include McDonalds, Pizza Hut, Yatra, Goibibo, Café Coffee Day, Barista, PVR Cinemas, Dominos, BIG Cinemas, Shoppers Stop, eBay, Cinemax, Indiaplaza, Crossword, @home, Vibes, Croma, etc.

VO: How does Freecharge.in deliver value for money to its prepaid users? How would you justify the cost involved?

KS: Traditionally, customers get a top-up recharge done by walking into a physical store. With the advent of Freecharge.in, customers no longer need to take the pains of finding and visiting a store. They can simply log on to www.freecharge.in and recharge in a convenient manner, that too with a proposition that makes the recharge virtually free.

When recharging on Freecharge.in, customers are eligible to get coupons worth the value of the recharge. For example, if a customer makes a recharge transaction of Rs 100, he/she would be eligible to opt for coupons worth Rs 100. This makes the recharge virtually free for our customers. Our customers can choose coupons from a variety of brands. Our endeavour is to create a mix of great brands to suit our customers’ likes, tastes and preferences. We are not in the business of buying coupons. It’s purely a marketing platform for brands to attract consumers through our channel. But, our revenues are linked to more transactions and repeat purchases. We are confident of the value proposition we provide to our customers and our mantra is to be positive.

VO: Please share your view and some facts and figures on the online prepaid recharge market in India. How have you seen it grow over a period of time?

KS: We are at about 75 per cent tele-density across the country and it is only going to grow over the next few years. With 85 crore prepaid users and approximately Rs 500 crore worth of recharges happening every day, it is clear that the prepaid market is huge. Even though online contributes to only 1 per cent of it, with internet penetration growing rapidly in Tier II and III cities, online transaction volumes are bound to grow.

Today’s youth is tech savvy and more likely to transact online if given a reason to do so. That’s where we’ve scored by answering the “why should I recharge online” question for our users by virtually making the recharge proposition free. We’ve grown 10 per cent month-on-month in the last one year and this is only going to continue.

VO: What initiatives have you taken/are taking to build consumer trust?

KS: Consumer trust is built by fulfilling the need for recharge, and with Freecharge.in, that happens instantly. Freecharge.in has long lasting associations with large consumer brands like McDonalds, CCD, Barista and many more, which indicate the belief our partners have in our model. Additionally, the last mile acceptance of coupons adds to the consumer trust.

We are associated with MasterCard – a brand that globally stands for trust. Consumers using MasterCard cards get double the value coupon as a part of the promotion. There are many more similar initiatives that we are focusing on, which would take place in due course of time to build affinity and trust among the consumers.

VO: What have been the roadblocks in establishing the couponing culture in India? What has been your learning on the way?

KS: As compared to the western markets, couponing, as a culture in India, is still at a nascent stage. We faced challenges like users finding the offers too good to be true and hence not believing in it. It was only after people experienced Freecharge.in that they realised the value of the coupons offered. In a way, it helped us because most of our business growth has happened by word of mouth and viral marketing.

Technology is a critical aspect of our business. We’ve successfully implemented both physical as well as e-coupons for our users. We continuously strive to make the offers better for our users by bringing in innovative products/propositions.

What we have learnt and also believe is that spamming offers to people does not get results. This rather dilutes the entire proposition of offering the discount coupon. We created a platform for users to come, pick and choose, which coupons they would like to opt for. This led to an increase in the percentage realisation of these coupons, thus fulfilling the objectives of our retail/e-tail partners as well.

VO: How do you reach out to your target audience? What is your marketing strategy?

KS: Social media is a strong way to connect with the audience and that is what we followed to start with. Facebook, Twitter and blogs have been a great tool to interact with our users. This has helped us understand their needs, wants and desires. It has also helped us grow virally.

We carry out in-house surveys within our user groups to find out what brands they like and what offers they did not like on Freecharge.in. We take these feedbacks as learning for improvement and betterment of our offerings.

We have focused only on BTL so far. Going forward, we will be looking at ATL marketing activities as well.

VO: What special steps are you taking to survive competition? Who are your competitors?

KS: The quality of customer relationship and providing value to customers are important in doing business and that is where we have an edge above others. We have exclusive tie-ups with some of our partners, thus making our proposition unique.

Brand Freecharge.in is Accelyst Solution’s original model, thus it is bound to have copy cats. There are many online recharge players in India, however, we do not term ourselves as a ‘recharge company’. We continuously strive to better our own achievements and keep setting higher goals, challenging ourselves with innovative strategies to attract consumers and deliver the best than the rest. For us, sky is the limit. We are in a different orbit than our competitors and that is how we would like it to be. We have seen competitors trying to dilute our proposition by spamming the user’s inbox with unwanted coupons. It is sad that they don’t understand the model and the logic behind the concept. But we are happy to let them continue doing what they are best at without worrying too much.

VO: What is your growth plan(s)? Please share your phase wise expansion/growth plan.

KS: Freecharge.in entered the industry as a pioneer in providing e-commerce solutions to its prepaid users. Currently, we are in the top 5 in India in terms of the number of online transactions. We are on a consistent growth phase. Sequoia Capital, a renowned venture capitalist firm, recently invested around Rs 20 crore in Freecharge.in owing to the immense potential that they saw in our company. We will add more value and more and more coupons for our customers. We plan to distribute over 1 million coupons per day in the next 12 months. We are planning to add coupons for FMCG products, movie tickets and even up-market product coupons, etc. We want to make the value proposition stronger for all our customers across all economic strata. 

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