Published on March 9th, 2009 | by Saurabh Pandey

2 Million ONLINE Leads Market for BFSI Sector in India!

One of the largest spenders on internet in India is the Banking and Finance Services Industry (BFSI). No, don’t be under any illusion, BFSI sector is not the most evolved sector when it comes to using the web to it’s full potential.

Anyways, a large chunk of spending by BFSI can be attributed to generating and buying leads for various products including loans, insurance and credit cards.

Let’s try and estimate the total quantum of leads that are generated on the web today in India annually for the financial sector.

Let’s look at the Credit Card market first:

Total Credit Card Base in India: 27.5 million

This base should increase to about 40m by 2010. (Source: Indian Express, Oct 19, 2008)

Hence roughly the market is growing by 25%.

This means that between 2007 and 2008, roughly 5.5m credit cards were added, and between 2008 and 2009 roughly 6.8m cards will be added.

Now, how many of these cards originated ‘online’?

Again assuming that online mechanism contributes to only about 5% of the overall cards issued in the country: we get a figure of 3.4lac cards issued through online origination.

So for the year 2008-09, we should expect 3.4 lac cards to be issued through the ‘online origination’ channel.

But not all leads that originate online are successful, infact the success ratio for a lead through any channel ranges from 20% to 30%

Optimistically, if we assume that 25% of all leads converted into successful issuance: the total number of leads to be generated ‘online’ in 2008-09 should be: 1.38m

India Online Credit Card Leads Generation Market Size: 1.38m

Value of each lead (considering duplication, false leads etc.) @ INR 80- About INR 110m (USD 2.2m)

Let’s do a similar analysis for Loans Leads in India

Let’s use a surrogate here and try estimate the market size:

ApnaLoan claims to have serviced 4lac customers till today. (Source: www.apnaloan.com)

Assumptions:

Since ApnaLoan is a lead based model these 4lac customers are essentially leads.

Apna Loan is a market leader and hence we assume that it controls about 40% of the market alone. (The rest is controlled by Banks and various other small time lead generators)

Apna Loan is active since last 8 years. Let’s assume that they serviced 50% of their entire base during the last 2 years.

Implications:

This means that Apna loan generated 2 lac leads in the last 2 years

And since the market is growing at 25 odd% per year, we assume that it generated roughly 90000 leads in 2007-08 and 110,000 leads in 2008-09

Now linking back with our assumptions, we know that 1.1 lac leads are 40% of the total market.

Which implies that the total online loans lead generation market size is: 2.75lac

The value of this market @ INR 120 per lead is: INR33m (More than half-a-million USD)

Insurance:

Total Insurance market in India is worth INR 1.5lac Cr. (USD 30b). (Source: www.indiaonestop.com)

This market is growing at about 17% per annum.

Which means we shall add INR 25000Cr. (USD5b) in 2008-09 to our base.

Assuming that the average premium size is INR 10,000, we shall hence add 2.5Cr policies in 2008-09.

Assuming that online contributes to just about 0.5% of the total policies issued: the market size is about 1.27lac.

Since, again, not all leads convert into policies, and assuming that only 30% of leads finally get converted;

The total market size of Online Insurance Leads: 4.25 Lac

The value of this market @ INR120 is: INR 5.1Cr. (USD1m)

Conclusion:

Total online leads for financial sector- around 2million per year

Total Market Value @ INR 95: INR 19 Cr. (USD 3.8m) per year

Caveat: We have used various surrogates and assumptions, including in-exhaustive range of products and lead fee. Recession has also taken a toll in terms of contraction of credit card issuance and loan sanctions by banks. Hence the above may not be an exactly true picture of Lead economy for Financial sector in India. The attempt was to put forward a logical thought process and derive a value and size from the same. This article can help get a view of the estimates and also provide a base for further calculations.

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