Upstox, tells Urvashi Valechat that Upstox aims to have over 300 million customers in the next five years. Edited excerpts:
CRISIL Ratings forecasts that while the brokerage industry will see net positive growth in FY22, it is likely to be muted as account additions would not be as high as in FY21. How would the slowing account additions impact your business?
We believe the momentum that the industry gained last year will continue well into this year. Statistically speaking, the number of demat account additions has been steadily growing. At Upstox, we have seen a steep rise in account openings, raising our market share by over two times compared to a year ago. Simultaneously, an increasing number of participants are diversifying their investment portfolio beyond traditional financial instruments, especially into equity-based instruments. While increasing demat account openings is just one part of our expansion plan, we also focus on growth through new product offerings and services.
Which direction are the markets headed in? What are your concerns with respect to the current market and what kind of returns are expected from the markets?
The fast-spreading second wave of Covid-19 in India along with vaccine supply issues have caused volatility in the markets for a while now. There are many important triggers that are currently swaying the investor sentiment, which are likely to impact the Indian markets.
Any other strategic decisions that Upstox would likely make?
At Upstox, our vision is to make investing simple, affordable and accessible to people from all walks of life, and we are on track to achieve it. While we have over three million customers currently, our customer base has grown three to four times in the last three years. We hope to continue this growth in the year ahead. We aim to have over 300 million customers in the next five years.
Could you give us details of the client base and growth areas?
We are now at 3 million customers. Over 60% of our customers are new to the market, while over 75% of the existing customer base is below the age of 35 years. We recorded five-fold growth in account opening by women in 2020, compared to 2019. In fact, more than 30% of them are housewives. Currently, over 70% of Upstox’s total customer base belongs to Tier-II and Tier-III regions. We believe that deep India will lead growth going forward.
How are you differentiating yourself from the other online broking players in the market?
Our biggest USP is that we are a technology-first company that offers financial services to its customers. Our platforms provide a better and more intuitive user experience. We closely look at our clients’ feedback, which helps us in making customer-centric innovations. From analysing the market to viewing charts and placing trades, everything can be done in a few taps on a mobile phone. This makes trading easier for first-time market participants. We launched Upstox Pro Web 3.0, which has an enhanced user interface for a better trading experience.
What are some key trends that you have observed with respect to your new investors?
Customers are vigorously embracing the potential of smartphones and are increasingly trading via mobile apps. More than 85% of Upstox customers place their daily trades on mobile phones. Growth of equity investing orders has gone up by 1.5x in March 2021 as compared to April 2020. Also, we have observed that a large number of individuals are looking for additional sources of income beyond traditional instruments. Hence, there is a surge in the number of retail investors in India.
Currently, over 70% of Upstox’s total customer base belongs to Tier-II and Tier-III cities, and we look forward to exploring the untapped market in the coming months.
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