Is Cred really a Masterstroke?
Flipkart and Amazon changed the way we shop, Oyo changed the way we book hotels, Zomato and Swiggy changed the way we order food, Ola and Uber changed the way we travel, and Cred is in the process of changing the way people manage their credit card bills.
Oh, wait! Cred is a lot more than just paying your credit card bills on time.
The main thing that is forcing me to write this article is yes that Rahul Dravid ad or Cred’s creative marketing campaigns in general, but more importantly, the thing that Cred is an Indian company and not just a complete copycat of American ones.
Cred targeted that free ka maal vali mentality of people to become one of the best startups in our country. Ruko jara, Cred is not yet profitable though. Itne ads dikhayenge to kaha se profit hoga yar.
In the financial year 2020, Cred only earned 52 lakh in revenue while its expenses were 386 crores.
Par par par, Cred is continuously raising large amounts of money from investors. As of April 2021, cred’s valuation is 2.2 billion dollars ( 16,000 crores), yes you heard that right..while that does not mean they have this much cash, more on these terms any other day.
In simple words, koi durse bade log jinke pass bohot paisa hai wo Cred ke business me paisa dalte hai. Par kyu, because they know if abhi nhi par future me iss company me maalamal hone ka potential hai, to phr wo log bhi maalmal ho sakte hai.
But how so that Cred has so much buzz in the market? Because of ads?
No, they have money to show ads because their product is great, they are solving a real problem and have a decent business model.
What does Cred actually do?
Before Cred, a person who had a credit card had to deal with a lot of problems like hidden charges, late fees, extra interest etc.
Let’s understand this with an example. Suppose a person has 3 credit cards in the family. Now, card A’s payment due date is on the 10th, card B’s on the 15th and card C’s on the 20th of a month. To wo aadmi kya sirf tareek pe tarrek tareek pe tarrek hi yad rakhe kya?
The customer had to pay each bill on a different platform, keep a record of all the transactions of each card separately and pay the bills with some hidden charges that these banks somehow add to our bills, of course.
Cred app tracks, records, manages and provides a platform to pay all your bills in one place so that we don’t have to do that extra work of analyzing each card separately. They send you reminders via Whatsapp if there is a due date. This app tracks your bank emails, collects all the information and shows us each and every detail in a summarized form. No more hidden charges problem now.
Remember, something of this kind happened in Tarrak Mehta..chuna laga ke lol.
Some people also say that the design (UI/UX) of the app is so great that makes them go to Cred instead of these boring bank applications.
Now, kaam ki baat pe aate hai, Cashbacks!!!
Whenever you pay your bill through Cred, they give you Cred coins. Using these coins, you can unlock various exclusive online shopping offers from all the top brands, cashback offers etc.
And these offers are/ were really great when the app started. But now they are slowly reducing these. But they are still better than Google Pay or Paytm rewards. Just like Jio, pehle free deke logo ko aadat laga dete hai, phr dheere dheere they come on track.
This is from our consumer point of view, but what about how they earn money?
Business model
Currently, Cred’s business model relies on making revenues through the income from offer listing fees of businesses..that means the offers that you see on the app which you can redeem using Cred coins, brands give money to Cred to show their company’s offer there.
What! brands will spend money to offer discounts to people. Yes, because every time a person buys the product, it is the brand whose product is sold.
Abhi to Cred has not earned much money, but in the future, they are going to earn a lot. Why? Because the customers of Cred are rich people, who have money. Cred has 60 lakh customers now, or about 22% of all credit card holders and 35% of all the “premium” credit cardholders.
And Cred has data on the spending habits of all these people.
Cred uses this data to show more accurate offers to people about their favourite products after they pay their bills, of course, and they are going to buy these products because they are rich people, after all, they have 2–3 credit cards.
Cred can also sell this data to banks who want to find more of such customers so that they can sell one more card to them, or offer loans and all. The bank’s work of finding high-profile customers is cut short by Cred, so Cred will ask them for money in exchange for this data.
Ending words
In short, Cred’s high profile and rich customers are where it wins and that is why Cred is said to be the next big success story in the Indian startup space. And it gives me immense joy to know that it’s an Indian app that is playing so big. Who knows Cred becomes a bank tomorrow?
So, Cred is a masterstroke from a business point of view, I leave it to you if you feel is it from a customer point of view.
