Episode 3 | Decoding Zero Commission Models ft. Ritesh Banglani & Rahul Chowdhri | Interstellar | Meesho, Rapido, Namma Yatri

Zero Commission Models: Disruptive or Just a Pricing Play?

Startups like Meesho, Rapido, and Namma Yatri have disrupted their industries with zero commission models, by removing sales-based commissions while keeping costs low for customers.

But the big question remains: Are these models really unique, or are they a different way of arriving at the same business economics?

In this bonus episode of Interstellar, Rahul & Ritesh break down how Zero Commission Models work, where they thrive, and the untapped opportunities for emerging founders.

Reach Rahul Chowdhri:

X: https://x.com/rchowdhri

LinkedIn: https://www.linkedin.com/in/rahulchowdhri/

Reach Ritesh Banglani:

X: https://x.com/banglani

LinkedIn: https://www.linkedin.com/in/riteshbanglani/

Find us on

Spotify - https://open.spotify.com/show/550RoqvavxjC2pl8Ma7LHa?si=edd3593e8fce49d0

Apple podcasts - https://podcasts.apple.com/us/podcast/interstellar-by-stellaris/id1794113841

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In this episode of Interstellar, we cover:

00:00 Trailer

‍00:57 What are zero commission models?

‍03:10 How do companies that adopt a zero commission model make money?

‍04:22 Does ‘zero commission’ mean zero fees?

‍06:24 What kind of scale is necessary to sustain a zero commission model?

‍07:30 Does unbundling of operations create a more scalable business?

‍10:18 Does this translate to unbundling-led price discrimination?

‍13:23 On the incentive alignment between the supplier and platform

‍16:01 Is there danger of concentrating demand in the hands of suppliers with the deepest pockets?

‍19:11 Who handles customer experience in zero commission models if so many services are unbundled?

‍25:05 In cases where customers can tell a good supplier from a bad one, can zero commission models work?

‍27:12 Does this apply for experiential products? What are some markers of quality?

‍28:51 How do zero commission platforms make their margins? Do they sell extra services?

‍30:44 Does a platform charging for advertisements instead of transactions make it less efficient?

‍35:24 Cost for the supplier v/s cost for the platform – is the cost of doing business lower for a supplier in India?

‍37:28 Are zero commission models a way to expand the TAM in India?

‍40:22 What are some new opportunities for zero commission models?

‍44:00 Closing comments

Link to references:

Uber scraps commission, leaves fare for negotiation: https://timesofindia.indiatimes.com/city/chennai/uber-scraps-commission-leaves-fare-negotiation-to-passengers/articleshow/118366493.cms

Rapido is done just being a bike-taxi app. It's dead set on becoming the next Ola: https://the-ken.com/story/rapido-is-done-just-being-a-bike-taxi-app-its-dead-set-on-becoming-the-next-ola/

Meesho narrows adjusted losses to Rs 53 crore in FY24, achieves profitability milestone: https://www.newindianexpress.com/business/2024/Oct/30/meesho-narrows-adjusted-losses-to-rs-53-crore-in-fy24-achieves-profitability-milestone

Food Delivery Market Size: https://economictimes.indiatimes.com/tech/startups/online-food-delivery-market-to-grow-18-on-year-to-rs-2-lakh-crore-by-2030-bain-report/articleshow/111452013.cms?from=mdr

Hotel Market Size: https://www.livemint.com/industry/infrastructure/hotel-industry-to-contribute-1-5-tn-to-gdp-by-2047-11692120793671.html

Home Services Market Size: https://www.grandviewresearch.com/horizon/outlook/online-on-demand-home-services-market/india

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