Is stock broking franchise a viable investment opportunity?
Stockbroking has moved to newer heights in the present situation. It has witnessed lots of customers coming for the first time to the capital market. The highest number of Demat accounts were opened at the beginning of the year 2020. The main reason being that fear creates an urge to save. This increased savings in various forms.
The traditional broking model was a brick and mortar business with offices, relationship managers, branches, and research. People did move online in other segments but not in broking. Soon stock broking also entered the online market with some players.
5paisa.com is one of the fastest-growing broking companies in the country. It has over 7 lakh customers and 5 million app users. Its USP is 0% brokerage and flat INR 10 per trade.
5paisa.com has a strategy to move online through a mobile app that serves multiple platforms. It removes the branches and relationship managers. The cost automatically lowers to a great extent. This attracts a huge customer base. Currently, it has moved to tier3 cities and beyond.
Who can be a Franchise Partner?
Anyone from a non-trading background can partner with 5paisa.com. The company approached two sets of people for partnership.
- Those that are already working and are looking for additional income sources.
- Those who don’t want to have a business and want to run a self-business. They are aware of the digital world and understand technology.
5paisa.com focused on the second set of people who were fresher and young. The company believes that those without experience are the best fit for a franchisee.
Currently, the stock markets are growing and banking is also working. All you need is
- A laptop or a mobile
- An internet connection
And you are set to go. There is no requirement for experience in finance. What is needed is to understand the brand and some research on the industry to get customers to the company’s platform.
There is no formal training required. There will be videos to watch mostly in Hindi and other local languages. These videos are generally short. Other learning can take place through webinars, blogs, and websites. Three learning videos and one self-made video can be put on their Facebook or Instagram or YouTube platform to start with your business.
For any partner to remain in the long-run has to be engaged in the business. To maintain this engagement level, 5paisa.com helps the franchisees to differentiate themselves. They give them a list of unique content ideas to create a different video. Also, it supports them in creating these videos initially.
5paisa.com Cultural fit
The main focus is to attract an investor who is new to the industry and never invested in the stock market. This is done in two ways
- Internally - These are factors at the customer level.
- Building products and processes that are simple and in the local language.
- Easy to download or access
- Lesser memory space
- Externally - These are the factors at the communication level.
- Communicate by keeping prices low
- Clear communication and focus on a few products rather than a large number of products.
- Keeping those products only which people can do it themselves and are digital where no paperwork is required.
How the company keeps its customers engaged?
The company has three modes to keep their customers engaged.
- Simple platform - Easy digital platform. Research tools and advisory functions are provided on additional charges.
- Digital gold - It introduced an investing option in Digi gold moving forward from equity and mutual fund.
- Personal loans - Given an option for customers to take a loan.
Role of a Franchisee
There are few of the partners who have reached great heights in several months. But this is possible only if the partner is socially aware, good at engaging with people, and takes the work seriously.
The company helps with a small team that is available on an online platform. It enables the partners to see where they stand. Creative content is provided on this platform and it also helps them to run contests and offers.
A franchisee has to be a differentiator only then will the customer be attracted.
Edited By: Vaishnavi Gupta