Groww, an eight-year-old wealth management startup, has continued to assert its dominance in terms of active clients. By the end of 2023, the number of active traders on the Groww platform reached 7.6 million, maintaining a lead over its closest competitor, Zerodha, which reported around 6.7 million active traders.
AngelOne, another player in the Mumbai-based stock trading space, secured the third position with 5.3 million active traders in 2023, showcasing significant year-over-year growth.
What makes Groww’s performance particularly noteworthy is the remarkable surge in active online traders during the last quarter of 2023.
It was September 2023 when Groww surpassed Zerodha, emerging as India’s largest stock broker platform by volume. Groww boasted 6.6 million active traders compared to Zerodha’s 6.4 million. Crunching the numbers, the three months between September and December 2023 witnessed astounding growth for Groww, adding a million new active traders to its platform. In contrast, Zerodha experienced a more modest increase, expanding its user base by 300,000 during the same period.
Adding to the growth narrative in India’s fintech space, AngelOne also made a significant impact by attracting 500,000 new active traders to its platform in CY Q4 2023.
Notably, in less than three years, Groww has exhibited a more rapid expansion of its user base compared to Zerodha. In March 2021, Zerodha had around 3.4 million customers on its platform, while Groww had 0.78 million. Since then, Zerodha’s user base has only doubled, whereas Groww has witnessed an extraordinary surge in its customer base, achieving an impressive growth rate of over 870% within the same time frame.
So, what factors are contributing to the surge in the active traders on Groww, particularly in the last two years?
One key contributing factor is Groww’s customer-friendly approach to account opening fees. While Zerodha charges Rs 200 for opening a trading account, Groww has made this process entirely cost-free, removing a financial barrier and making it more accessible for potential users.
Another important aspect is Groww’s decision to waive Annual Maintenance Charges (AMC) for Demat Accounts. In contrast, Zerodha levies Rs 300 for Demat Account AMC. This pricing strategy positions Groww as a cost-effective alternative, attracting users who seek a platform with minimal associated fees.
Groww Facing Setbacks
Although Groww has been making significant strides in the fintech sector, recent developments suggest that the platform is not without its challenges. One notable setback involved technical glitches that affected the trading experience for its active users.
Groww CEO Lalit Keshre acknowledged the issue on social media platform X (formerly Twitter) and emphasized the need for more effective communication with customers.
“We understand that the stakes are higher now, with lakhs of serious traders on Groww, and even a few minutes of downtime can have an adverse impact on our customers,” Lalit Keshre, CEO at Groww, wrote on X.
The technical glitch on the Groww platform occurred on January 23, 2024, a day when the BSE (Bombay Stock Exchange) closed at 70,370 points. This closing figure marked one of the lowest points observed in the last month.
In response, the CEO expressed the company’s commitment to investing heavily in building a robust system. He highlighted the fact that Groww boasts the largest engineering team dedicated to this purpose. Additionally, the company is in the process of constructing a new parallel system that can function as a fallback in extreme circumstances, reinforcing its dedication to ensuring a reliable and seamless user experience.
In addition, Groww has recently announced the discontinuation of investments in US stocks. The company emailed this change to its users, stating, “Please note that fresh funding of USD balance and buying of US Stocks will be discontinued from 27th of February.”
It’s worth noting that Groww had already ceased offering the option to invest in US stocks for new users almost a year ago. As of now, the platform has approximately 1,500 to 2,000 users who continue to hold US stocks through Groww.
For customers investing in mutual funds or ETFs in INR (Indian Rupees), the process remains unaffected, and they can continue doing so without any complications. However, customers remitting money in USD to purchase stocks on US exchanges directly will face restrictions. Despite this change, Groww has assured its users that they will take measures to ensure a smooth transition for those affected. The platform has decided to support existing holdings or facilitate selling for users with current investments in USD.
Which platform do you prefer most for stock trading: Groww, Zerodha, or another contender? Let us know in the comment section below!
