Zerodha’s demat market share shrinking, says founder Nithin Kamath. How is it coping?

Discount broker Zerodha is grappling with a demat market share loss despite growth in the assets under management (AUM). The company is addressing the issue by creating content, even though it remains unsure about its impact so far.

On Thursday, Zerodha Founder & CEO Nithin Kamath posed a question for founders and marketing professionals on his X handle if traditional strategies used in the past to acquire customers will be useful now. Kamath also explained how his company was coping up with the problem.

“Here’s the context: Our AUM share is growing (people with more money trust us), but our demat share is shrinking (fewer new accounts). The people with money are sticking with us, but many others aren’t opening accounts with us

. Most likely, the newer and younger, and people from tier 2 and 3 towns, are probably investing elsewhere,” Kamath said.

“Question for founders & marketing folks: Can brands still rely on the same tactics and strategies that worked in the past, or do changing times demand new strategies,” Kamath probed.

“So, how do you grow when you can’t play the traditional acquisition game? The obvious answer may be “content,” and we have significantly improved on it, but it’s hard to measure the impact,” Kamath said. “If you were in our shoes, what would you do?”

Kamath also highlighted the challenges of Zerodha. “The challenge is that once people pick a platform, they rarely switch. And we have constraints that our competitors don’t: We won’t advertise. We won’t offer account-opening incentives. Broking is cyclical by nature,” the tweet said.India’s largest retail brokerage Zerodha recently launched a dedicated initiative to assist investors in converting old physical share certificates into digital demat format, even if they are not Zerodha customers. The move came amid rising concerns about stranded legacy investments, especially those inherited through family holdings.

Kamath had announced the initiative on social media, stating that the company receives numerous queries from individuals who have stumbled upon physical share certificates belonging to their parents or grandparents.

Zerodha Kite is Zerodha’s flagship, mobile-first trading platform for trading and investing in the Indian stock market.

Also Read: Zerodha to help investors dematerialise old share certificates, no account needed: Nithin Kamath

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