Case Study of cred app: the strange case of the new Indian credit card application spent whooping 700 bucks to earn a single buck


Cred is an extremely popular and trustworthy fintech application in India. Starting just around 2018, Cred has gained 35-40% market share in credit card payments competing with India’s Paytm and UPI. While these companies took 5-10 years to capture the market, Cred did it in 2 years only.

Let us know look at Cred’s business model and marketing strategy.

First of all, let us understand what is Cred?

What is cred?

cred is a fintech application. A Fintech application is a sync of technology and financial services that upgrades business operations by providing easier financial services through the use of technology. A fintech application is a service that offers different financial services apart from traditional services.

Cred operates in the region of credit card bill payments and in India, systems for paying credit card bill is different from other billing systems.

credit cards
credit cards

Immensely popular online payment systems in India like Google pay and Paytm carried out a digital disruption in the market. This was new and replaced slow-tiring banking systems.

cred app is based on a similar idea. cred offers credit card bill payments in exchange for rewards and offers. This business idea is new in the market, different, and has a well-categorized niche of around 6 million-plus users.

It allows users only after a credit score of 750+ to be able to make use of its services. This makes cred app’s users the elite and those who aren’t, also, make bill payments on time to be on Cred.

Below 750 credit score users increase their credit score to be able to use cred as they are on Cred’s waiting list. This is what makes Cred unique.

Also, it is one of the best UI/UX applications in the market. With its smooth flow and design. The cred app is safe to use as it does not share anybody’s data with third parties.

Let us now look at Cred’s business model.

Business Model of Cred

The shocking thing about Cred is that it doesn’t have any fixed business model. Cred relies heavily on marketing. Most of the budget is spent on marketing.

Cred opted in some top celebrities to create awareness about its services. It all started with an Ad featuring Indian Celebrity Jim Sarbh. The Ad was educational enough to showcase services offered by Cred. Soon, people started to download and use the application.

Then, Cred started advertising heavily. They soon roped in popular Indian singers Alka Yagnik and Kumar Sanu and created a musical ad. The ad seems pleasant and melodious and got low skip rates.

Then, Cred started to feature popular Bollywood actors Madhuri Dixit, Govinda, and Anil Kapoor in their usual type of musical advertisements and dancing types. Cred’s advertisements were entertaining enough to watch.

Then, looking at the fact that Cricket is the most popular sport in India with millions of spectators, Cred partnered with the Indian Premiere League-a cricket tournament. To promote this, Cred partnered with popular cricketer Rahul Dravid. The content of the ad is hilarious. The content of the ad soon became meme material. This is known as meme marketing. Cred knows how to do viral trends and the cringe content in its advertisements was enough to get users’ attention.

Cred knows how to be in Trend. So, Cred featured Indian gold Olympic winner Neeraj Chopra in its advertisements. The ad was a success and has over 16 million views on YouTube. The ad is funny and features Neeraj Chopra in different looks. This ad was enough to gain the attention of everyone.

Now, the question arises that what is Cred gaining from all of this.

What is cred gaining?

With such heavy advertisement and marketing costs, the cred app has recently suffered a loss of 360+ crore.

Let us dive deep into Cred’s numbers.

Cred had almost zero revenue in FY2019. Expenses around 63 crore and losses around 60 Cr.

While, in FY2020, they had 52 lakh revenue with the expense of 378 Cr and a loss of 360 Cr.

cred app spends INR 727 to get conversion- that means to earn INR 1.

Not good numbers, but still managed to hit a 2.2 billion dollar valuation? Here is how.

Reason for Cred’s survival: Marketing and Advertising?

The reason why the cred app is successful is because of the money it spends on marketing and advertising.

This is because it generates more customers for them. cred app earns through them and spends that money on fixed deposits. They get a good return from deposits.

The next, thing is that they have built their trust in the market because of their top services and one of the best applications in terms of UI/UX.

They have gained trust from the audience and the investors as well. Cred’s founder Kunal Shah is one of the most respected entrepreneurs in India. This makes investors trust Cred more. This helped them to generate funding from investors in various seed funding rounds.

This is the main reason why a company like Cred not having much revenue and booking losses was still able to be valued at 2 billion dollars.

All because of trust gained from top-quality services and marketing.


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