Crypto-selling platforms and wealth management players have attracted these first-time investors on the back of increased awareness about financial products, a boom in the stock markets, listings by new-age startups and targeted advertising aimed at this group, the executives said.
According to state-wise user registration data from the BSE, user signups in Uttar Pradesh have increased by almost 60% as of August 23 compared to the previous year.
It has grown by 70% in Odisha, 191% in Assam, 85% in Bihar and 80% in Madhya Pradesh in the same period.
Overall, there has been a 45% increase in registered investors to more than 70 million, compared to the previous year.
The trend has come as good news for online financial investment companies, who are doubling down on content in regional languages, local partnerships, and tapping regional influencers.
According to Paytm Money, investor signups from the top 30 non-metro cities, such as Varanasi and Warangal, grew at a 30% higher rate than the comparable growth seen for metros this year. Users from non-metros are more attracted to investing in equity than direct mutual funds, a company spokesperson said.
Online wealth management platform INDMoney registered 60% of its total new user sign-ups from tier II and tier III towns this year compared to 30% eight months ago.
ETtechSimilarly, crypto selling platform CoinSwitch Kuber reported a 135% month-on-month growth in sign-ups from non-metro cities since June last year, with Patna in the lead, according to data shared with ET.
Passive income stream
Trading is passive income for young Indians
Apart from reduced entry barriers to the capital markets, the non-metro regions present a young, aspirational India to these companies where financial freedom is a big theme, industry experts said.
“A single source of income is not enough if you want to be rich. You should have a passive income that is more than your active income, which can take care of your expenses,” said 25-year-old Iqshant Aggarwal from Raipur, the capital of Chhattisgarh. “This is the freedom provided by investing and trading.”
Aggarwal, who has a full-time job at a pharmaceutical consulting company, trades daily and has a diversified portfolio of direct mutual funds and stocks. A small portion of his investment is in cryptocurrency.
ETtechTrading offers the flexibility and ability to earn money that a 9-to-5 job does not, said A. Aanchal, who has bachelor’s degree in business management.
“Following the Covid-19 pandemic, everything has become chaotic outside, and it’s not easy to get a job. For freshers, you get about Rs 25,000 a month…,” said the 22-year-old from Mysuru in Karnataka.
Aanchal began trading after completing a financial literacy course with Havenspire, an online learning platform for stock market trading.
“I am not okay with working eight hours a day under someone else. I’d rather be financially independent, based on my learnings and my skills,” she said.
Ritvik Vipin, Chairman at Havenspire said “A lot of youngsters from tier two and tier three cities have lost jobs past a year. Most among these youngsters who now are trying out new ways to establish stable career, now feel stock trading is a more reliable option among others. Influence of a huge amount of information available online is one of the major driver for this trend. Unlike those from tier one cities, families and friends of these youngsters are not knowledgeable enough to guide them about stock trading.” He added that financial literacy is helping those in the age group learn to trade and earn money comparable to a corporate salary.
Fresh catch
New-age online investment platforms are eager to onboard users like Aggarwal and Aanchal.
CoinDCX,
a freshly minted crypto unicorn, clocked a 48.7X growth in user signups from tier II and tier III cities in the last six months. The company’s focus is on local language content to capture the growing interest from this section of customers.
“For non-metro cities, we are planning more local language content on digital assets, reaching out to regional influencers online and offline. Being a part of their local festive activities is also one of the ways we are looking to educate and attract audiences,” said Ramalingam Subramanian, the chief of marketing at CoinDCX.
The company has earmarked over Rs 10 crore for educational initiatives to onboard more users.
Social commerce startup Trell, which has a dominant user base in tier II and tier III cities, said financial services firms – both traditional and new age – have been increasingly partnering with influencers on their platforms to reach young adults over the last eight months.
Pulkit Aggarwal, CEO and cofounder of Trell, said Telugu, English, Hindi, Tamil and Marathi are the top 5 languages that brands use for campaigns.
The platform has worked with brands such as Muthoot Finance, crypto trading platform CoinSwitch Kuber and online brokerage Upstox.
“The information sources that potential investors could access were only in English. So, that was a deterrent earlier,” said Pranjal Kamra, CEO of Finology, a financial advisory firm.
“Now a critical mass has been achieved in local language content. If someone who does not understand English wants to access content and understand what the stock market is, there’s been enough available for them to do so in the last 18 months,” he added.
Ishtaarth Dalmia, a senior executive at Dentsu Webchutney that has handled clients like Google, Uber and Under Armour, said marketing spends for financial products had jumped in the last 18 months. This has had ramifications on how financial products are communicated, he said, adding that localisation and education have become key tools to drive marketing spends in the category.
Financial literacy and education are the key focus areas for these capital-rich online platforms which have birthed a new generation of financial influencers, ET reported earlier.
The future of financial education is in regional languages, said Prateek Singh, founder and CEO, LearnApp.com, which has witnessed an increase of almost 7-8% in terms of new users every month from tier II and III cities.
Kamra of Finology said the diversity is reflected in the queries from non-metro investors on his platform, which range from initial public offerings and investment products, often outpacing those from metros.
“A more diverse participation in the market depth of companies being analysed has increased because if you have more people, they bring other kinds of exposure and experiences with them, and they want to ask questions about companies which operate in their cities, towns, and villages,” he said.
