Mumbai: Discount or online brokers have emerged as the predominant winners in the client acquisition race in the past five years. However, bank-owned brokers continue to maintain the highest average revenue per user (ARPU), though their share has shrunk compared to discount brokers in this period, according to a study by global consultancy firm Bain & Company.
According to the study, the market share of discount brokers’ active clients has climbed from 8% in FY18 to 49% in FY23. In terms of revenue, their market share also increased from 8% to 26% during the same period.
“Digital-first brokers have emerged as the winners in acquiring new clients, as they capitalise on the transformational shifts in demography and preferences towards digital platforms,” said Misha Pratap, partner at Bain & Company. “The key catalyst driving this paradigm shift is the superior customer experience offered by these new-age brokers.”
Pratap said bank-owned brokers continue to hold the highest ARPU driven by sustained influence over high-value traders aided by consistent pricing strategies.
The Indian retail brokerage industry has nearly doubled its revenue from ₹14,000 crore in FY19 to ₹27,000 crore in FY23, posting a compounded annual growth rate of 17% in this period. The revenues are estimated to soar to ₹55,000-60,000 crore in five years, according to Bain.
