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CRED CEO Kunal Shah: Most second-time entrepreneurs target top 40 million customers

It is hard to monetise a business that caters to everyone, Kunal Shah says, adding Chinese are leagues ahead of Indians—per capita income of urban China is far higher. While 90% of the urban Chinese women work, in India, the number is just 10%.

September 04, 2020 / 02:23 PM IST
Cred founder-CEO Kunal Shah

Cred founder-CEO Kunal Shah

Most second-time Indian entrepreneurs target the top 30-40 million customers because they know how difficult it is to monetise a business catering to everyone, Kunal Shah, founder and chief executive of fintech startup Cred, has told Moneycontrol.

Cred is Shah's second venture after he sold Freecharge to Snapdeal in 2015 for $400 million. The company has positioned itself as a platform to reward customers with good credit scores. It helps them pay credit card bills and offers them vouchers and discount coupons for retail outlets.

"They have all tried to go after hundreds of millions of customers and realised it's insanely hard to monetise people who do not have money," Shah told Moneycontrol during the podcast Setting Sail.

Setting Sail podcast | Freecharge co-founder and CRED CEO Kunal Shah on how to become a second-time entrepreneur

Indians, he said, make a huge mistake by comparing themselves to the Chinese. "Ninety percent of urban Chinese women work and the per capita income of urban China is significantly higher. For us to match Indonesia's per capita income, we will take 14 years to forget about China," he said.


In India, barely 10 percent of the urban women work. The country has the lowest female participation of labour in Asia, lower than Pakistan and Bangladesh.

This is also reflected in credit market— 95 percent of all loans in India are taken by men.

"A lot of these factors are just completely ignored. The question is there are 30-40 million customers...if you do not build good products for them, why go and chase these 500 million customers, which currently don’t even have money," Shah said.

The company claims to manage 12 percent of all the credit card bill payments in the country right now. It targets to get to the scale of 30-40 percent over the next 14 months.

Founded two years ago, Cred has started to monetise its product only now. It recently launched a product allowing customers to pay their rent through credit cards. It has launched initiatives with small merchants where they are facilitating some commerce for them.

The company, however, is not targeting profitability in the immediate future.

"If you are going for the highest affluent segment and you are going for the highest consumption segment, as long as you're able to retain these customers and make them consume on the platform, revenue and profitability is something that can happen eventually," Shah said.

"But at this point of time, the company is going to be solely focused on growing both revenue as well as scale of the company and prioritise profit once we have managed to get a significant market share of these customers."

Credit card penetration in India has grown from 18 million in 2015 to 52 million with a monthly spending of $8.1 billion. It stood at $1.8 billion a month in 2015.
Priyanka Sahay
first published: Sep 4, 2020 02:05 pm

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