Apart from being the Co-founder and CEO at FreeCharge, Kunal Shah is an avid student of behavioral economics & science and a hardcore poker player. A proud college dropout from the NMIMS MBA program, Kunal believes in the power of things being “FREE.” While working at his previous startup PaisaBack, Kunal was struck by an epiphany that talk time can be made “Free” by giving away coupons and vouchers along with recharges. Hence, along with Sudeep Tandon, they co-founded FreeCharge in August 2010 with the aim to build a business that turned recharge in to rewarding experiences for customers.
In your own words what is FreeCharge.in?
FreeCharge is a simple concept of making recharge and utility payments rewarding and convenient. Now with the introduction of mobile wallet, FreeCharge will further leverage this concept.
How did you come up with the idea of FreeCharge.in?
The idea of FreeCharge came up with the simple Indian concept of ‘free’ rewards. During my last employment at PaisaBack, I was struck by the fact that recharges can be made ‘free’ by giving away coupons and vouchers along with the recharges. Hence, Sudeep Tandon and I co-founded the idea of FreeCharge in August 2010 and focused to build a business that turned the boring and dull payments in to rewarding experiences for customers. On further research of the market, an unusual idea of free recharges and bill payments was brought to life.
Could you walk us through the process of starting up FreeCharge.in?
The process of starting up FreeCharge was pure hard work. It started with the development of the concept itself which further took shape when we gathered our technical team to develop the software of FreeCharge and later landed up partnering with a brand like McDonalds. Presently, FreeCharge works with premium partners and has built an amazingly impressive array of partnerships across online & offline retail brands in the country such as McDonalds, Flipkart, Amazon, Cleartrip, Snapdeal, Yatra, Dominos, Costa Coffee, Baskin Robbins, PVR, etc.
After which, there was no looking back. We have today developed a strong network of more than 30 million user base of loyal consumers. At FreeCharge, our focus is to support users with different kinds of payments at present ranging from mobile, DTH, electricity and utility payments across all the major telecom giants like Vodafone, Airtel, Reliance, Idea, BSNL and more. Growing at a rapid pace, we are moving towards becoming the fastest, most convenient and rewarding destination for mundane payments. Our major focus is to bring in efficiencies in the cash flows.
Did you encounter any particular difficulties during startup and if so, how did you guys overcome it?
Start-up journeys are bumpy, and the next roadblock is never far away. Like any other entrepreneur, I too faced several challenges. One of the challenges we faced germinated from the widespread perception in the venture capital industry that recharge is a bad business because of low margins and supplier concentration. It seemed difficult to start a new firm in an industry where the idea of your propositions isn’t respected. Another hurdle we encountered was finding good talent to grow our team. The technology platform was built in a hurry and our users were experiencing failed transactions as we tried to grow faster. However, we sailed through this hurdle too. We moved to Bangalore and it helped us strengthen our technology team as well as expand our employee base across all departments. In January 2014, when the company launched its new mobile app, it accounted for barely 10% of all transactions. This was anything but motivating. But with passing time, in 2014 itself, the transactions grew almost 50 times! This boosted the team with immense confidence and pride. Slowly and steadily, FreeCharge became the No. 1 shopping app on Google Play, at least temporarily. Our TV campaign also helped give a boost to our app ranking and soon got the top spot within weeks of launching the campaign. All of this put together helped everyone understand that recharge has significant potential to acquire online transacting customers fast and as a business is here to stay for long. The satisfaction to bring about a change in perception of the industry pushed us to perform better.
How have you been developing FreeCharge.in since startup ?
FreeCharge has emerged as a leader in Mobile Commerce space in India and has grown over 1000% last year. We are leading the mobile commerce revolution in the country with 90% of transactions happening on FreeCharge’s app. Furthermore, post the acquisition with Snapdeal, it has further elevated the success. We deliver consumer experience through a mix of technology, design, partnerships and innovations and plan to add many more new categories to make mundane payments frictionless for our customers.
We recently launched FreeCharge Wallet and have already crossed 5 million users within a month of customer rollout. We as a team are extremely committed and are working very hard to provide our customers with convenient, safe and trustworthy payment methods. Snapdeal and FreeCharge together is over 87million registered users and we aim to get 100m active wallet users by March 2016. We aim for 100 million users transacting across all our platforms once a week in next 18months or so.
What kind of feedback did you get for FreeCharge.in so far?
We have been receiving great response from our customers. We hold pride in saying that we are the largest mobile commerce entity in India after acquisition with Snapdeal. FreeCharge has established an innovative channel to make the mundane payments invisible. Consumers need a platform they can trust with their money, convenience and experience a seamless transaction. At FreeCharge, we provide them a simple pure platform for recharge and utility bill payments. The vision is to make online payments and transactions’ experience rewarding and convenient. Over the past five years, FreeCharge has established a chain of more than 30million loyal customers who use FreeCharge for their recharge and utility payments.
The business model of FreeCharge is such that it can be replicated and scaled globally, especially in countries showing similar trends. FreeCharge is one of the few businesses in India which has innovated a business model and have the capacity to scale globally. At a time, when all the western models are being replicated in India, FreeCharge comes up as a refreshing business model gaining momentum at mass level. In addition to rewarding our customers with exclusive offers from some of the largest brands, we ensure safe and secured transactions safeguarding the customer details, provide a consumer friendly transaction experience, pay/ recharge on the go, help consumers migrate from offline experience to an online transaction by providing them a seamless bill payment experience in less than 10 seconds.
What is your strategy against your competition?
The story of online recharge and couponing business in India is led by FreeCharge with 90% transactions on our mobile app. We feel there is room for everyone to grow since the mobile transactions market in India is still dominated by 95% offline transactions. For us our primary competition is cash. We are aiming towards a cashless society and thus, cash becomes the major competition for all of us in the Industry.
Have you developed any industry insights that you could share?
The market space is still very fragmented in terms of consumer adoption and acceptance towards online/ mobile recharge. India is the second largest mobile market in the world. The mobile penetration in the country is close to 72%, and nearly 95% of mobile subscribers use prepaid recharge plans. Thus, the scope in the market is huge therefore all the companies providing online/mobile recharge service have tremendous opportunities. This industry is growing at a rapid pace and expected to grow at missile speed in the coming years.
Consumers are yet to develop habit of online payment and mobile wallets is a relatively new concept in India. Considering, smooth growth of infrastructure, technology and internet penetration; we can look at double paced growth in the next 2 years.
How do you plan to stay relevant in this industry?
To stay relevant in industry, we need to adopt the various developments in technology and other related fields. My team at FreeCharge is dedicated towards introducing new elements to enhance customer experience and ease and turn around the boring transactions industry.
Early adaptation and creating ways to provide convenient and creative solutions to customers is the key to retain them. Customer satisfaction is at the heart of FreeCharge. We revamped the website for our customers to experience easy and quick recharges.
What is the future of the industry in your opinion?
The growth story of mobile and internet in India is on the upsurge, from 200 million internet users in 2013 it is expected to rise to over 500 million internet users by 2017, including 314 mobile internet users. The industry has a long and bright future in India. The country is poised to see more people join the internet over the next 15 years than any other county. The prospect of 1 billion people online by 2030 sets the stage for enormous growth. Digital payment method is indeed bringing about a real overhaul in the way online payments are made and will surely advance even more in the future. Considering the growth rate of the industry, we expect immense scope in the industry. For an industry like this, short term plans are more beneficial.
Were there anything that disappointed you initially?
No. The fact that FreeCharge is a unique concept, it has never disappointed me at any stage.
What do you think about being an entrepreneur in Asia? Is it harder or easier, why?
Being an entrepreneur is an easy job which requires a lot of hard work. The beginning of the organization lies in the hands of the owner, who further designs a face to it.
In Asia, specifically India, we have great support from the government which is an asset to an aspiring entrepreneur. With initiatives like the Silicon Valley and startup India stand up India, it has opened gates for many new ventures and start-up organizations in various fields.
What is your opinion on Asian entrepreneurship vs Western entrepreneurship?
Asian entrepreneurship is very different from western entrepreneurship. Both of them require well laid out plan. The customer demands both in Asian and Western markets are different, thus making them two completely opposite targets which cannot be approached with same process. As the economy suffered a major setback globally, both Asia and the west are recovering and encouraging entrepreneurship especially among the youth of the country.
I support the idea that solving large local problems is one easy way for Asian startups to differentiate and sustain a competitive edge.
What is your definition of success?
Success is when you have built a solution to resolve customer problems and can scale it basis continuous feedback and have a satisfied customer.
Why did you decide to become an entrepreneur?
I am dedicated towards technology and creating convenient solutions. Thus, being a proud MBA dropout, I wanted to introduce a unique technology product which makes life easy and hassle free. While working at paisaback, I felt the demand for online recharge and payments and how they can be made interesting. I decided to provide solution to consumers which led to entrepreneurship.
What do you think are the most important things entrepreneurs should keep in mind?
Any entrepreneur should always have their focus on the idea they wish to develop after a strong backend research. A well-developed plan and directions for growth are a must.
In your opinion, what are the keys to entrepreneurial success?
The key to success is learning from the failures and be persistent towards your idea. Creating a positive environment within the company and its consumers is another key factor to success.
Keeping in mind the strategy and aim anyone can create a success network.
Any parting words of wisdom for entrepreneurs out there?
Summing up the conversation, all budding entrepreneurs must drive their focus towards developing a strong growth strategy in line with the market and consumer demand.