Zerodha CEO claims advertising would have just fattened Google and Meta’s wallets
“If we had advertised, much of our profits would have gone to Google and Meta," says Nithin Kamath, Zerodha's co-founder and CEO while explaining the firm's advertising approach.
ADVERTISEMENT
Online brokerage platform Zerodha has managed to amass more than 16 million users and oversee assets worth Rs 6 lakh crore without spending on advertising said its founder. Nithin Kamath, the company's co-founder and CEO, took to LinkedIn to discuss how the platform achieved this organic growth, crediting its success to a steadfast commitment to a customer-centric philosophy.
“India is a tough market to earn in,” he explained. “If we had advertised, much of our profits would have gone to Google and Meta. We may be the only B2C (business to consumer) company to have reached this scale without ever advertising. In hindsight, not advertising has helped us stay true to our philosophy of not pushing people to trade, no spam, etc."
According to Kamath, nearly 30 percent of Zerodha's users have come through referrals. He has long been an outspoken critic of advertising, likening it to a dangerous addiction.
When Zerodha was first launched in 2010, Kamath said the company simply didn’t have the resources for a marketing blitz. By the time they rolled out new products in 2015, Zerodha was already ahead of competitors. "We didn’t need to advertise because we weren’t competing for the same audience as giants like Flipkart and Amazon, who were targeting the masses. Our market was a small fraction of theirs," he explained.
In contrast, the country's leading online brokerage platform Groww has been spending on advertising and marketing campaigns. In fact, India’s top broking firm Groww extended its lead over competitors in October, even though it was the worst month for the equity market since the Covid shock in 2020.
The new-age wealth management startup’s active traders went past the 1.25 crore mark after the Bengaluru-based stockbroker added around 3.5 lakh users during the month, data available with the National Stock Exchange (NSE) shows, as reported by Moneycontrol.
Its nearest rival, Zerodha, had around 80 lakh investors, as the gap between the two widened to 45 lakh. Last year, Groww overtook Zerodha to emerge as the country’s leading broker when both players had around 64 lakh users.
Groww has almost doubled its user base in a year, while Zerodha added only 15 lakh new users, an average addition of 1.25 lakh a month. Groww has been adding around 5 lakh users a month.
