India is a country of prepaid accounts and it’s quite natural that online recharge services will spring up. There are quite a few online recharge services (like Mobikwik, Indiatimes tie up with Rechargeitnow etc).
Latest entrant in this space is Mumbai based Freecharge. Freecharge does what everybody else is doing, i.e. enables users to quickly recharge their prepaid account. But the differentiator lies in the discount coupons – Freecharge gives away coupons worth equal amount of what you have recharged, i.e. in essence, your recharge is made (virtually) free (Rs. 10 is charged as coupon delivery fee).
Market opportunity for online prepaid business is huge (currently, the online prepaid recharge business contributes to less than 1% of the total prepaid recharge), though the wafer thin margin of this business makes it an unviable opportunity to sell online (payment gateway fees etc). With the launch of freecharge, other players will probably start scouting partnerships with group buying sites (and hence, eroding more margin?).
Freecharge has currently partnered with 8 telecom operators and offers discount coupons from McDonald and Barista. An interesting concept, expect this to be a super hit service among student crowd who would loves to live on freebies.
Freecharge competes with the regular retail stores and the challenge lies in building a consumer brand, seeding WoM is the key (learn some lessons from Phokatcopy).
As far as the site is concerned, Freecharge is neatly done but needs a bit of usability enhancement. From the homepage, it doesn’t come out clearly the benefit of this service. Secondly, I am not too impressed with the random number generator (?) for users freecharged in the last 24 hours – am sure the team can do a much better job than this.
What’s your take? Do give Freecharge a spin and share your comments.
The company is incubated under Tandon Group, one of the members of Mumbai Angels.
Related Discussion Forum: need feedback on freecharge.in.
Disclosure: One of our author, Naman is part of the core team behind Freecharge.