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Why Freecharge's Business Model is so successful?

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Freecharge’s Company Overview


FreeCharge, founded in 2010 by Kunal Shah and Sandeep Tandon, is a prominent Indian digital payments and financial services platform. Initially established as a mobile recharge and utility bill payments platform, FreeCharge has evolved to offer a comprehensive range of digital payment solutions. The platform enables users to recharge mobile phones, pay utility bills, book tickets, and make online transactions seamlessly. Acquired by Axis Bank in 2017, FreeCharge has continued to innovate and expand its services, contributing to the digital transformation of financial transactions in India. Freecharge is India’s leading website for online recharge for Prepaid Mobile, Data Cards, DTH, and Postpaid Mobile Bill Payment. Every transaction you do is practically free - you get equal value rewards, offers, and benefits from over 300 premium brands in India in multiple categories like food, lifestyle, eCommerce, travel, and more. Freecharge was founded in 2010 by Kunal Shah and Sandeep Tandon to build a business model to set higher performance and user experience benchmarks. The company launched its mobile wallet in September 2015 and successfully enrolled over 1 million users in just 5 days, making it the fastest product adoption globally. The business model of FreeCharge is primarily based on a transaction fee model. The company earns revenue by charging a small fee or commission for facilitating various transactions made through its platform. This includes mobile recharges, bill payments, and online purchases. FreeCharge has also introduced partnerships with various merchants, allowing users to avail discounts and cashback offers when they make payments using the platform. Additionally, the company has ventured into financial services, offering features like digital wallets, UPI payments, and prepaid cards. FreeCharge's commitment to providing a secure, user-friendly, and rewarding digital payment experience has solidified its position as a leading player in India's digital financial landscape.

https://www.freecharge.in/

Country: India

Foundations date: 2010

Type: Private

Sector: Financials

Categories: eCommerce


Freecharge’s Customer Needs


Social impact:

Life changing: affiliation/belonging

Emotional: rewards me, fun/entertainment, attractiveness

Functional: saves time, simplifies, makes money, reduces risk, organizes, reduces effort, avoids hassles, reduces cost, quality, variety, informs


Freecharge’s Related Competitors



Freecharge’s Business Operations


Cross-selling:

Cross-selling is a business strategy in which additional services or goods are offered to the primary offering to attract new consumers and retain existing ones. Numerous businesses are increasingly diversifying their product lines with items that have little resemblance to their primary offerings. Walmart is one such example; they used to offer everything but food. They want their stores to function as one-stop shops. Thus, companies mitigate their reliance on particular items and increase overall sustainability by providing other goods and services.

Brokerage:

A brokerage firm's primary responsibility is to serve as a middleman, connecting buyers and sellers to complete transactions. Accordingly, brokerage firms are compensated through commission once a transaction is completed. For example, when a stock trade order is executed, a transaction fee is paid by an investor to repay the brokerage firm for its efforts in completing the transaction.

Advertising:

This approach generated money by sending promotional marketing messages from other businesses to customers. When you establish a for-profit company, one of the most critical aspects of your strategy is determining how to generate income. Many companies sell either products or services or a mix of the two. However, advertisers are frequently the source of the majority of all of the revenue for online businesses and media organizations. This is referred to as an ad-based income model.

Customer relationship:

Due to the high cost of client acquisition, acquiring a sizable wallet share, economies of scale are crucial. Customer relationship management (CRM) is a technique for dealing with a business's interactions with current and prospective customers that aims to analyze data about customers' interactions with a company to improve business relationships with customers, with a particular emphasis on retention, and ultimately to drive sales growth.

Customer data:

It primarily offers free services to users, stores their personal information, and acts as a platform for users to interact with one another. Additional value is generated by gathering and processing consumer data in advantageous ways for internal use or transfer to interested third parties. Revenue is produced by either directly selling the data to outsiders or by leveraging it for internal reasons, such as increasing the efficacy of advertising. Thus, innovative, sustainable Big Data business models are as prevalent and desired as they are elusive (i.e., data is the new oil).

Digital:

A digital strategy is a strategic management and a business reaction or solution to a digital issue, which is often best handled as part of a broader company plan. A digital strategy is frequently defined by the application of new technologies to existing business activities and a focus on enabling new digital skills for their company (such as those formed by the Information Age and frequently as a result of advances in digital technologies such as computers, data, telecommunication services, and the World wide web, to name a few).

Discount club:

The discount club concept is built on perpetual high-discount deals utilized as a continual marketing plan or a brief period (usually one day). This might be seen as a reduction in the face value of an invoice prepared in advance of its payments in the medium or long term.

Ecosystem:

A business ecosystem is a collection of related entities ? suppliers, distributors, customers, rivals, and government agencies ? collaborating and providing a particular product or service. The concept is that each entity in the ecosystem influences and is impacted by the others, resulting in an ever-changing connection. Therefore, each entity must be adaptive and flexible to live, much like a biological ecosystem. These connections are often backed by a shared technical platform and are based on the flow of information, resources, and artifacts in the software ecosystem.

Mobile first behavior:

It is intended to mean that as a company thinks about its website or its other digital means of communications, it should be thinking critically about the mobile experience and how customers and employees will interact with it from their many devices. The term is “mobile first,” and it is intended to mean that as a company thinks about its website or its other digital means of communications, it should be thinking critically about the mobile experience and how customers and employees will interact with it from their many devices.

Transaction facilitator:

The business acts as an acquirer, processing payments on behalf of online merchants, auction sites, and other commercial users for a fee. This encompasses all elements of purchasing, selling, and exchanging currencies at current or predetermined exchange rates. By far the biggest market in the world in terms of trade volume. The largest multinational banks are the leading players in this industry. Around the globe, financial hubs serve as anchors for trade between a diverse range of various kinds of buyers and sellers 24 hours a day, save on weekends.

Experience:

Disrupts by offering a better understanding that customers are willing to pay for. Experience companies that have progressed may begin charging for the value of the transformation that an experience provides. An experienced company charges for the feelings consumers get as a result of their interaction with it.

eCommerce:

Electronic commerce, or e-commerce (alternatively spelled eCommerce), is a business model, or a subset of a larger business model, that allows a company or person to do business via an electronic network, usually the internet. As a result, customers gain from increased accessibility and convenience, while the business benefits from integrating sales and distribution with other internal operations. Electronic commerce is prevalent throughout all four main market segments: business to business, business to consumer, consumer to consumer, and consumer to business. Ecommerce may be used to sell almost any goods or service, from books and music to financial services and airline tickets.

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