How would you feel when the most critical software that you use to run your business suddenly announces that they will no longer serves you?
This is what happened when Intuit QuickBooks announced that they are going to shut down their India business.
As a founder of a competing accounting software (ProfitBooks), I was surprised with this move and was also wondering about what made Quickbooks quit India.
I mean, they had everything at their disposal – right from a big brand name, talented team, access to virtually unlimited capital, domain expertise and so many other things that business owners wish for.
Then what went wrong? Why Quickbooks did not work in India?
Initially, I ignored these questions but being in the same industry, I couldn’t avoid facing it.
So, I started talking to the fellow business owners, CAs, bookkeepers and even some of Intuit’s customers who migrated to ProfitBooks to understand their point of view.
In this post, I’m going to share their opinions along with my views. I will also talk about Intuit QuickBooks business in the Indian market, probable reasons of their exit and the impact of this move on their existing customer base.
Small business owners are known to use all kinds of financial and business management software to organize their accounting and business data. There are established accounting software providers like Tally, Zoho, ProfitBooks in the marketplace to suit this need and one of the most coveted solutions in this domain is Intuit QuickBooks.
Intuit had recently announced that they will be shutting shop on QuickBooks in India on the 31st of January 2023, after a decade of operations. This date was revised to 30th April 2023 in line with the end of FY 2022-23, considering customer feedback and requests.
Additionally, the firm no longer accepts new subscriptions for QuickBooks Online, QuickBooks Online Accountant, QuickBooks Time, or QuickBooks mobile apps in India.
This came as a shock to business owners who trusted Intuit for managing their day-to-day finances.
Let’s first understand how it all started..
Cloud accounting, inventory management, cash flow management, and invoicing are all part of QuickBooks’ range of offerings. Through QuickBooks Online Accountant, it also offers chartered accountants an online practice management solution.
Even before QuickBooks was launched in India by Intuit in 2012, it was available for a full year in alpha and beta versions. QuickBooks positioned itself to target 2 million small companies with broadband connections when it entered the India market.
Tally was at that time QuickBooks’ strongest rival, dominating the small and medium business market. We had launched ProfitBooks around the same time and have been witnessing how the Indian marketing is evolving over the period.
Intuit’s India team was in charge of developing a number of the core features of QuickBooks Online Advance products, including the workflow automation platform, reporting platform, roles-based access, power tools for power users, and customization.
Affordability, accessibility, ease of use, and low pricing are a few of its selling points.
When GST regime was launched in India in 2017, all the major players applied to become GST Suvidha Provider (GSP). The objective was seamless GST compliances, but QuickBooks preferred not to participate in this journey inspite of all the financial and technical bandwidth on their side. QuickBooks was among the last product to became GST compliant. It never produced direct integration to GSTN portal. It was bit surprising move from a known name.
The most recent development was the announcement by Intuit India and Visa in March 2020 of a collaboration to boost business offerings for SME clients in India and then the pandemic happened.
QuickBooks in a recent event announced that they would be not accepting any new sign ups starting 1st of July 2022. All existing paid subscribers are entitled to a free subscription prior to 31 July 2022, to enable continued use through 30th April 2023 with no charges applied. They also advised their customers to download all their data from the site before the said last date of operations.
Their exit raises a lot of questions.
Let’s discuss about some of the possible reasons for this drastic move.
When I asked other founders this question, I got interesting responses. Sharing their feedback along with my thoughts below.
1.High competition from the regional players
There can be many reasons why QuickBooks never worked in India. One explanation might be that Intuit was finding it difficult to compete with other accounting software products in the highly competitive Indian market.
Many of regional companies offered their software at a cheaper price point than QuickBooks and had offline-line versions of their software.
Several domestic accounting software providers have emerged on the market throughout time, especially after the launch of GST. These indigenous companies may have benefited from promotion by the Atma Nirbhar Bharat initiative of the Indian government.
2.They preferred to focus on other markets
The fact that Intuit is concentrating its efforts on other areas could be another factor. The business may have determined that other markets would be more lucrative for it, therefore it is leaving India to concentrate on those.
Amit Mishra, founder of iMocha said, “Initially market size attracted them to India, however later they found TAM (Total Addressable Market) to be extra small considering readiness to adopt cloud and cultural behaviour.
When company takes the market decision, it is always with a bigger relative context. In this case, it might not prove to be a sizeable addressable market for them”.
3.They failed to understand Indian SMEs
Despite the benefits that this sector presents, it also presents certain difficulties that may be tough to overcome. A one-size-fits-all approach is not practical given the diversity of SMEs, which might include anything from small local grocers to major suppliers.
In order to provide suitable solutions, it is crucial for SME-focused players to possess detailed knowledge of the needs and a grasp of the difficulties.
QuickBooks was missing many India-specific practices like recording TDS when they initially launched in India.
At ProfitBooks, I have a first-hand experience of the challenges faced in Indian market. Indian business owner is very demanding and cost sensitive. People need someone to talk to before making a purchase and need constant hand holding.
4.Revenue from India was not significant
QuickBooks experimented a lot with their pricing. They sold the software from Rs.500/year to Rs.18,000/year.
We lost quite a few customers to them when they were selling the annual package at just Rs.500.
Ankit Dudhwewala, founder of SoftwareSuggest and CallHippo shared the same experience. He said, “They did not bill enough & were giving the product for Rs 500 per year for a long long time.
I think revenue was the primary reason. We should have happily paid 20-25k but they never asked for it.”
5.Accountant’s love for Tally
Every accountant in India had done Tally certification course after graduating from college. Tally’s popularity in the CA fraternity is unparalleled.
Pyanank Agrawal, founder of Housewise said, “Tally is very well entrenched in the CA community. Even if a company wants to shift from Tally to something else, the CA and his staff would rebel. QuickBooks realized that it was not worth the fight”.
Similar experience was shared by Amita, founder of Clairvoyant – “We had QuickBooks and our CA just didn’t like it. They maintained Tally anyway. Even after we changed CA (for some other reason), same thing happened. And we stopped using QB (for India)”.
6.Technology-readiness of Indian market
Even with good internet penetration and digitisation, I feel we Indians have still not warmed up to SaaS products. Indian business owners are still not comfortable paying for a software subscription using credit card.
Then most of the banks in India still don’t offer APIs for transaction feed. Some payment gateways and Neo Banks are trying to bridge this gap but it’s a still long way to go.
Nityananda Rao, founder of ACTouch ERP said, “They underestimated Indian Market and its competitors. They assumed Indian SOHO will be happy to buy WHAT THEY offer and its GOOD. If you give a product FREE, Indian customers will still come and ask for the Customisation.
DIY doesn’t work in India. Many bugs in software. So cost of support was huge and took time to fix.
KDK Software Fiasco – They bought this company for more than Rs 100 crores (KDK product is used by 25,000 CAs), and KDK owner bought it back for 20 Crores.
Indian SMEs wants OFFLINE software, PAY ONCE and NO MORE PAYMENTs.”
What’s really surprising is to me is that QuickBooks decided to exit at a time when Business procedures in Small and medium enterprises, like those in many other sectors, are being increasingly digitalize. This includes bookkeeping, payments, inventory management, and invoicing. SMEs are increasing their technological spending.
According to a research, Indian business IT companies garnered more than $3.2 Billion in financing in 2021 alone compared to $1.6 Billion 2020. Indian Software service firms are also on track to generate $30 billion in sales by 2025 and hold 8% to 9% of the worldwide Service software market.
The departure of QuickBooks will enable its rivals, like ProfitBooks, Zoho and Tally, to gain and expand market share. With enough time in Indian market, these firms are now operating successful businesses. They have an ever increasing, clients and customer base in India and overseas.
Among accounting software vendors, QuickBooks has been the best-known for its user-friendly design, powerful functionality, and wide range of third-party connectors. That’s the reason why QuickBooks was quite a popular accounting tool with small and medium business owners.
At this time when QuickBooks has shut shop in India, there is a huge opportunity that is posed for all the rival companies.
The accounting software market in India is increasing by the day, and it’s turning to be heavily competitive. A competitive marketplace is the best for the customers as they are the ones that get the best value for money while the service providers are constantly working on smoothening their services and user experience.
With the exit of QuickBooks, it’s now on the users to find the best alternatives for the accounting needs of their business and then it has also opened doors for the rivals to acquire new customer base.
Zoho has been focusing on Indian business since GST launch and enjoys good reputation among Indian SMEs.
ProfitBooks is around since 2012 and popular for its ease of use. Startups and newly registered businesses choose ProfitBooks as their first accounting software because of the free ‘Startup’ plan. It’s rated highly on software review sites like Capterra.
Tally is loved by accountants and enjoys strong brand recall in the Indian market.
With QuickBooks exit from Indian market, a small business owner will be more cautious while choosing their accounting software.
If you are a business owner, looking for an accounting software, check out these 8 tips for choosing a right software for your business.
And if you are an existing Quickbooks user, check out this Quickbooks alternative in India.
What are your thoughts on QuickBooks exiting India? Please share in the comments section below.
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