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  • Success Stories ‘60% of our clients are new to the mutual fund industry’

    ‘60% of our clients are new to the mutual fund industry’

    Mukesh Kalra, CEO, ETMONEY shares with us how his company has been bringing non-KYC customers to the MF fold.
    Team Cafemutual Jul 4, 2019

    ETMONEY went direct last year. How has been the response from investors?

    We have been growing 30%+ month on month since then and have emerged as one of the fastest companies to cross Rs.2,500 crore of AUM in mutual fund investments. We are on our way to double this number by the end of this year. The number of new SIPs that we are now driving is ahead of every online player and also ahead of large traditional bank distributors or brokers or platforms. We have been able to not only grow but retain consumers & assets on the platform, even after heavy market volatility.

    What was the idea behind having a mobile focussed platform instead of a web based service?

    When we entered 2.5yrs ago, there was no one building mobile-first investing solution. All big players were on web and porting their product to mobile, which we knew never works. We could see a clear white-space in going mobile-first.

    Secondly and more importantly, mobile gave us opportunities to innovate more rapidly across the investing journey for the user. For example, we were the first company to do full online KYC using the video capabilities of mobile. We still get 60%+ of our users who are new to the industry (Non-KYC) and hence we are proud to do our bit in improving mutual fund penetration in India. We have introduced a slew of features like instant withdrawal, SIP registration without first installment and the option to Skip SIP installments with a single tap. Last week, we pioneered Instant-SIP setup which removes the long (upto 28 days) physical process of downloading, scanning and emailing the ECS mandate to setup SIP. Instant-SIP setup takes less than 30 seconds and is completely online. We believe this can change the way SIPs are setup in India.

    Thirdly, we have been clear that eventually the real value users will get is through personalization i.e. enabling users to find the most suitable fund given her risk profile and reach their financial goals. Mobile enables 10x better personalization & more importantly at big scale.

    How do you get investors to download your app? What is your customer acquisition strategy?

    No incentivization or cashback in any form is the biggest advantage of this category. It boils down to “what real value you give to the users so that they come to you & only you.” A combination of a paperless, on-demand experience, personalization and user’s trust has helped us get 64% of investors organically i.e. through word of mouth. This helps us to keep the cost of acquiring users to be super low and enables us to invest in better customer experience and support, which in turn feeds more word of mouth. That’s our simple and efficient customer acquisition and satisfaction loop.

    The second order advantage of such a strategy is that it helps us provide the real benefit of technology-led low cost advantage to our users. For example - enabling them to invest in direct plans and earn higher returns than regular mutual funds every year. I don’t think other players in the market have such low cost and hence there are sustainability issues for them, not for us.

    Investing is a complex process. How do you guide investors on choosing suitable products online by themselves?

    Investing is perceived to be complex because there is no simplification, transparency and trust. We are changing that by solving the entire journey from decision to purchase to management using data and simplification.

    We built industry’s only mutual fund report card for every fund in the country, which is in plain, understandable English. We analyze 2,000+ funds daily to create this report that helps users understand the performance, risk of the fund easily. The clear jargon-free, data led approach solves for transparency in a big way and makes the user confident.

    We also help consumers to choose a portfolio of funds, which has proven good performance and matches risk.  This helps users to skip the individual fund research and directly invest in a bouquet of best funds. The money to be invested in each fund is also pre-decided based on diversification logic and performance. Users have complete flexibility to change all aspects and customise the solution. For users who have complex goals & needs, we do have a certified tech-enabled advisory team available on phone.

    Any interesting investor trends you have observed among your client base.

    1. Users from smaller towns (B30) contribute 30%+ of our base
    2. Unlike common misconception that direct mutual fund users redeem frequently, users on our app are not redeeming and have invested for long term. Our redemption rates are half of the industry in the equity, hybrid category. Our churn rates are 1/5th of the industry in the retail segment.
    3. In the last 2.5years, if we consider all investments made by our users till date as one portfolio, this has beaten the benchmarks by significant margin. This means either we have only smart investors coming in or we have ensured that we make them smarter investors.

    You started by offering direct mutual funds and now offer loans and insurance too.  What is the idea of offering multiple product categories?

    These initiatives are part of our mission to simplify financial journey of Indians from one place. We don’t throw the user in the sea of 100s of options but provide a simple, transparent solution for their core financial needs.

    How do you identify cross-selling opportunities among your clients?

    Our product launches are outcomes of consumer insight led development. This has helped us not only create a unique ecosystem of products but also helps us successfully up-sell products in non-intrusive manner, which is also in the interest of the consumer. This in turn ensures revenue generation and hence long term business sustainability.

    Have a query or a doubt?
    Need a clarification or more information on an issue?
    Cafemutual welcomes all mutual fund and insurance related questions. So write in to us at newsdesk@cafemutual.com

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    5 Comments
    Harsh Mahajan · 5 years ago `
    Have u seen any business model who has no challenges...and what about income part why r they so desperate on increasing AUM if the only income model is cross-selling.....hence its proved that they are getting paid by AMC unethically which is not allowed and also the interviewer is also biased to growth only... I have met clients who have been misguided by et and converted from direct to regular...
    the only big positive they are reaching to more clients but after conversion no one to look after....Blog writers have no idea of asset allocation and human interaction.....by doing everything robotic you are creating unemployment and for your short benefits, you also publish Pros not cons.
    Amit Shah · 5 years ago
    Why the khujli? grapes are sour?
    Reply
    ANNAPURNA APARTMENTS · 5 years ago `
    Its good that 60% of your investors are new to the industry and you are helping to grow the industry , and i am no way against direct ,but can you please explain as to how you plan to retain a minimum of 50 % of such new investors and ensure that they never leave the industry as they would have been acquired of misinformed data , advertisements and such practices.
    aMIT sHAH · 5 years ago
    The same way u missell bhai they also do. Why so much khujli?
    Reply
    dweepesh khulbe · 5 years ago `
    At least 55% came there for their 25 lakh which you promised just saved 1% .
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