I differ with you on that bold statement. The others too are perhaps as experienced as you in the markets, if not more. They too must have done their cost calculations before declaring their schemes. No reason to believe that they would overlook an obvious parameter like the trading platform. As long as NSE provides NOW, and as long as most of the small traders trade NFO (+ maybe CDS), NOW suffices as to their basic trading needs. Most of the small traders are not aware of the advanced trading tools and hence have no need of them as yet. Your experience with NOW usage would have told you that 90% (maybe) of the traders use it for simple "Buy" or "Sell". Maybe for "SL". Most of them do not even explore the menus.
As long as such traders are there, their desire for a yet another cheaper broker will continue to get fed. And that like endless.
You have the first move advantage where discount brokers go, and you have so far kept it up with good customer service.
The other discount brokers too do not lag behind in respect of customer services. The difference is that the customer now has a wide range of options to choose from.
I see that you are opening branch offices rapidly. Doesn't that add to your costs ?
It is important to have multiple brokers in the same space, only then can the business model sustain. Today 85% of the retail trading business happens through discount brokers in the US and we think in 3 years from now, it will be the same here.
I think 3 years from now, you would have a lot more options than what is available presently and hopefully we would be in the forefront.
About NOW, hmm... as a person on the other side you would not understand the limitations, so no point discussing that. But if you ask any broker who is completely online, I am sure it will not fit in the scheme of things on a longer term basis, everyone would be looking at ways to increase revenues and move out of it. What you think is the problem with NOW is not for the client, it is for the broker offering who has to run risk management on it who faces the problem. The challenge would be when you make that technology move, the cost of servicing a client who does only 1 trade a month and one who does 200 trades a month changes, in terms of bandwidth utilization charges, license charges etc. If people can adapt to it at a fixed monthly scheme and offer the performance of collocated servers, i'd say kudos.
What we are doing is not opening branches, they are low cost support centers setup with partnership with people who believe the model is for the future and India is still a nascent market for broking business. Less than 70lk unique accounts and an abysmally low 20lk people who take 1 trade/year and less than 10lk active investor/trading community. For a population of 120 crores, it is actually pretty disgraceful for an economy like ours that only so many participate. For any country to get to the next level, you need active participation in the capital markets.
Brokers themselves are to be blamed for this, traditional ones who force clients to take trades and loose money and ensuring that they never come back to the markets.
What sets the developed markets apart is the professional attitude of investors/traders, which is lacking in India. The fact that people don't want anything other than a buy/sell on their terminal is worrying. By lowering brokerage or running any schemes that we as discount brokers run or the so called big names, we are all churning the same pool of 10lk active investor/trader.
We all need to wait and watch for a broker who will get people to start trading professionally. Give access to tools which is required for it and more importantly train on those tools. You might say this is all bull ****, I just need a buy/sell from a broker, but our capital markets will remain as it is if nothing is changed soon. Our capital markets are in pretty pathetic stage, if you look at liquidity in the markets. So guess we have to be that change if you want to see the change. Just read the article on the big boy launching, will be very interesting to see what they do when they launch, because they will have the potential to change the way India trades in a very short period of time.
Here is one for Reliance and hoping that big brother gets it right..
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Damn!! how is anyone trading commodities over the last few days, nerve wracking just looking at it move...
