Freecharge copycats

sinha

Freecharge has defined a new business model - something that nobody in India ever tried. What's interesting is a set of clones that the company has inspired. Including a few big names, here is what I am in the know of.

- Mobikwik.com

- Paytm.com

- Rechargeitnow.com

- Rechargefree.com

- Funbuck.in

- Freeyourecharge.com

- Easymobilerecharge.com

- ibibo

While PayTM, Mobikwik and Rechargeitnow are the BIG ones (with a diff business model earlier, but have now taken the coupon route), there are a few sites that have cropped up which are just too similar to Freecharge.

Is this the NEXT BIG thing in India?

vivek

Again, its easy to start a e-recharge site. There's a turnkey setup which people buy and launch the site. Freecharge innovated by giving free coupon. Others copied.

I think there will be few more sites popping out soon and will die in few months as this is a high-volume, low-margin business and not everyone can get a high volume to survive and expand.

sameerparwani

The coupons are just a gimmick. The large majority of these coupons (or better coupons) are available for free on coupon code websites (such as mine). Freecharge and the others just package these freely available coupons into a nice concept where the user BELIEVES he is getting something of value in return when he completes a recharge. But in reality, they are usually being sent coupons that are available elsewhere without any required purchase.

So I wouldn't say all these sites are in the business of providing coupons in return for a Recharge. For Freecharge, it was a method of differentiation. Users perceived that they were being given something extra of value for their recharge. Other sites were giving nothing so users preferred Freecharge. The other sites realized they could do the same and users would then have no reason to prefer Freecharge. So all have jumped into the same game. But sooner or later users will realize that every recharge site gives coupons and that the coupons are of little value, so they will tire of seeing these coupon offers and will not take the coupon into account anymore (very similar to the overexposure of daily deals - users eventually realized it just wasn't that interesting anymore)

kunalb11

Ashish: good to see a forum like PI raising such discussion and acknowledging the innovation created by an Indian company whereas the rest just ape the western models.

@Sameer: if you look at FreeCharge carefully there are many coupons which are not available anywhere and we distribute/sell more coupons than all daily deal sites put together in India :)

We are aware of atleast 5-10 new sites trying to imitate FreeCharge, and we do have a patent pending status for our business model to protect it :)

bijay

Yes this is a great model started by FreeCharge and now everyone is joining in. But recently there are so many junk coupons ( eg. Rs5000 worth vowchers in GoIbibo) being given that this model might lose the sheen it had in the early days. But kudos to FreeCharge for defining a great model.

rakeshkhajuria

Ok a question.
Freecharge's model gives consumers coupons worth the recharge. i.e recharge for 100 and get coupons worth 100. What stops from another company from start giving more coupons, may be double or triple or more?

I can see things like recharge with mastercard and get double value coupons on freecharge site also, but if some player starts giving more coupons, then others will have to give too and this will keep on increasing too and fro, thereby lowering the worth of coupons itself.

One check could be from coupon partners only, who may restrict the usage at one voucher per recharge. Maybe its already thr. but then one can give multi company coupons, restricting at one per company. Then also at can be recharge for 100 and get coupons worth 500. Yeah then tieups and exclusivity will matter then, but why would a coupon company want to restrict to one vendor(though McDonalds is one case), they may want to reach more audience?

AMAN

Rightly said!

sinha

Maybe its time we start patenting business models as well.

bijay

@sinha Yes that is very important because most of the awesome work done by startups are getting copied by others very fast. I hear zipdial has patents pending which surely helps them continue their great effort without fighting a clone.

suchi

FreeCharge does have patent on their business model, the same can be checked out here: http://www.thehindu.com/business/Industry/article961334.ece

Rohan

It's amazing how India lacks innovation and copies things
blatantly.

sameerparwani

@kunalb11, I'm aware you guys have some nice coupons. For example, the McDonald's one is useful. But I said *most*, but not all, of the coupons are of little value. The majority of the coupons listed on recharge websites are available elsewhere for free, especially the coupons that can be availed at online merchants.

I'm not trying to attack your business model. What you guys came up with was unique. But now it's being replicated across the board and it's lost that uniqueness. It's become a race for who can list the most coupons on their site and the new coupons being added are generally not unique.

Good luck with the patent. If you guys are the only one in the game, it has a much greater chance of retaining the perception of value with users.

subtletea

Every great concept in history has had copy-cats. FreeCharge is a pioneer that connected couponing culture with recharges.

How many recharge sites allow you to select coupons? And when they do, how many have coupons that you can actually use? However junky, McDonalds may be, their coupons are relevant, so are coffee shop coupons.

To address Sameer's question about most coupons being available on other sites. The point is, many couponing only sites have expired coupons. What we sometimes forget is the primary benefit is a recharge, the value you get in coupons is the wow factor. FreeCharge owns this premise.

Bottomline with 850+mn mobile phone users, 97% of which are prepaid, and only 1% indulging in online recharges, the market is wide open for 4-5 guys. I just hope the competitors find their own niche than aping FreeCharge!

sameerparwani

@subtletea: "The point is, many couponing only sites have expired coupons."

Yes, that is the case for many of the coupon code sites. Generally my site CouponDunia is pretty good with the valid vs expired coupons especially for the most popular sites. I have a team who goes through and rechecks coupons on a constant basis.

"What we sometimes forget is the primary benefit is a recharge, the value you get in coupons is the wow factor"

You're right. There is a "wow" factor. There isn't much actual value in providing coupons but its the perception that creates a "wow" I'm getting something in return. My point was that the actual utility of what is given is much less than the current perception. So as this continues, the perception of utility will decrease on a per user basis for two reasons: a) Users will suffer from coupon fatigue as they see coupons offered from many recharge merchants b) Users will realize that many of the coupons can generally be found without any required purchase on coupon code websites

However, as you mentioned, the market still has a LOT of room to grow. So, Freecharge will continue to do very well. The recharge business is one where it is difficult to differentiate your product from others, but Freecharge has successfully done so. At least for now.

Jimish

Interesting. Yeah, Have seen this a lot and everyone wants to copy Freecharge. Well, something @kunalb11 should feel proud of ;) But surely with coupons being available freely on the internet, the differentiating factor would be quality of coupons (where i think freecharge is way ahead of the pack) and ease of recharge (prob a sms to recharge from one's online account??)

The problem with exclusive coupons is that other websites in India pick up exclusive coupons very quickly. Whenever we have an exclusive coupon, its available on other websites within less than 10 minutes. And does not remain exclusive anymore. :( (PS: I am not complaining..)

The moment these recharge players start distributing one time use coupon codes which are exclusive to them, they would continue to create the "wow" factor, imho. Just generic coupon codes will not make the cut.

And there is also a big question on how long the current coupon-ing model survive in India. As more people start using the coupon(s), the real value of coupon goes down significantly. Websites having generic coupons freely floated everywhere, generally tend to hike prices accordingly. Its matter of time before customers learns that the same product is available cheaper elsewhere without a coupon. Websites having coupons floated in the market, have no option but to hike prices since every other user buys with a coupon and it cuts down their margins significantly. Only one time use coupon code would create a true customer acquisition as there is more value to the coupon and it does give customer real monetary benefits as well and not just a perceived discount.

chiraged

The major problem with Freecharge is that they deliver physical coupons to your doorsteps & for this they charge Rs 10 Flat.

While on the other hand services like PayTm sends coupon as sms/email & no extra charges at all.

So this is quite good as compared to paying extra for physical coupons :)

sameerparwani

@chiraged Freecharge also does e-coupons.

rohittuteja85

Just researched a little as per indian laws:

Per Section 3(k), business methods are not patentable per se. However they are patentable if a new method solves a "technical" problem and an apparatus/system is involved. don't know if giving recharge coupons helps solving a technical problem

Shubhs

Exactly
There is no way business model of freecharge can be patented in India

bijay

I think high time these laws should be re looked into. Also I feel FreeCharge's business model is more like their Intellectual Property so they should get a patent.

susantasaren

@bijay But they are not solving a technical problem and no apparatus/system is involved. So do you think they will get the patent?

bijay

@susantasaren I'm not sure if they will but lets hope they do. Cos that will allow entrepreneurs to execute their their brilliant ideas.

sameerparwani

I'm not a lawyer but I don't think Freecharge's base transaction should be patentable. The transaction is "you give me money, I give you recharges and coupons". If that's patentable, then should a drug store be able to patent "you give me money, I give you a toothbrush and some coupons" and so on?

Maybe they can patent the idea that "We say the recharge is free because we give them coupons in an equal amount to their recharge" so that no other site can claim "free recharge". But they shouldn't be allowed to patent the idea of giving coupons with a recharge in general

bijay

@sameerparwani very good point.

ForeverHungry

I don't think business models should be patentable. Already the idea of patents have been extended to patenting "ideas" and not implementations of those ideas, leading to patent trolls, huge corporate warfare with legal suits on violating trivial patents, which are only on paper.

Even lots of concepts in Android have been taken from Apple. Without android and its unique business model, Apple wouldn't have competition and now that windows is going to try the same business model I would as well say with business model patent, there would be virtually very less competition.

Clones are not a new phenomenon. Only the ones who listen to customer demands survive. Cruel law of nature wherein even though you reach first, you do not win!!

PratapHowardHughes

If one can patent business model
that means no competition...and it will also be repugnant to philosophy of MRTP Act

Vick

There is a flipside to this model.

(1) If the consumer is not happy with the service offering of the discounted merchant, then that might reflect poorly on FreeCharge's brand and consumer might go elsewhere.

(2) Distribution/ Acceptability of coupons is an issue they haven't got ahead of. For example, my McDonald's coupon was only for North India whereas this wasn't stated or even made clear to me during the whole purchase cycle. Or even after it, until the time I got it in my hand. This caused me regret and I never purchased from FC again.

SunnyAhuja

I love freecharge coupons specially mcdonalds

roshya

Looks the uniueness of the freecharge.in is hit by other similar models in market

Freestuff : Visit www.freewaalastore.com

vikasagarwal42

their is nothing bad in copying anyone else idea. because its a business u will perform good will persist in market.

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