Exclusive | Out-innovating the competition: Freecharge's Kunal Shah

Founded in 2010, FreeCharge.in, the domestic online platform for prepaid mobile recharge, Set-top box re-charge and data segment and thereby made recharges virtually free. Freecharge was co-founded by Kunal Shah and has been funded by Sequoia Capital and the Tandon Group.

Commenting on the rationale behind starting a venture like Freecharge, Kunal Shah, CEO & Co-Founder said to Adgully, “We started around the same time when the Indian market saw a flurry of 'deal' sites. We believed that deal sites aren't scalable as an average user isn't on the lookout for deals 24/7. Deals have to be accidental, we thought. But need, which is the reason why most businesses exist should be the pulling factor for any business. India is still an early market for such deals only based business and we felt that we should concentrate on the basic need of the average Indian mobile user - recharging. Hence the idea of Freecharge was born.” The company claims to be in the top 5 sites in India already in terms of transactions per day.  The future trends are very positive and it’s only bound to grow as number of people recharging online is only set to grow. Freecharge is looking at gaining a significant market share in coming days.

With over 95% of  mobile subscriber base on a prepaid connection, the future could be bright for FreeCharge, as the country ushers in a new generation of savvy netizens and smart phone users. But for the company the growth achieved so far has not been without challenges. Says Shah, “From Oct 2009 when the product was conceptualized till date, there have been several problems, most of which have been overcome. One of the major hurdles is that big companies have a mindset that goes against the concept of “free”. It has taken us a lot of effort to convince operators and retailers that this does not in any way harm their brand.” Though there have been some who having seen the benefit have given an enthusiastic response, other have come on board watching the early few. Other problems that the company faces are that it needs to drive hard bargains when it comes to payment gateway commissions. There have been some issues integrating the payment gateways with Freecharge’s website besides managing logistics.

As for competition, there are players based on the online recharge model, and players working on the couponing model. “But the market is very large and this is not winner takes all market. Our strategy to tackle competition is always going to be out-innovating them. Over last one year we have seen all recharge sites convert to coupon models after our success,” Says Shah.

Freecharge also has tie ups with some of the best retail partners in the country, including McDonald's, Barista, Cafe Coffee Day, Cinemax, and more. “This is due to the fact that for advertisers and brand marketers, FreeCharge acts as a perfect trial or lead generation platform to capture relevant, targeted and transacting customers,” says Shah. Both online and offline players have leveraged the FreeCharge platform to generate relevant, transacting leads and footfalls;  to generate trials of their products and services; and to engage in product sampling with our customers.

The company works on a business model that is a win-win proposition for three parties, customer, operators and merchants. Avers Shah, “Customers love us because they get freebies along with their recharge, operators love us as we help sell their recharge product and merchants love us as we help them gain additional footfalls. We make a small fee from all 3 parties benefiting here and create profitability for ourselves.”