Is it better for DiDi to focus on increasing ride frequency or growing its user base?

Introduction

The key trade-off we're examining is whether DiDi should focus on increasing ride frequency or growing its user base. This decision is crucial for DiDi's growth strategy and resource allocation. I'll analyze this trade-off by considering the product ecosystem, potential impacts, key metrics, and experimental approaches to inform a data-driven recommendation.

Step 1

Clarifying Questions (3 minutes)

• What is DiDi's current market share and competitive landscape?

• Why it matters: Understanding DiDi's position helps prioritize growth vs. retention.
• Hypothetical answer: DiDi has 70% market share in its primary market.
• Impact: High market share might favor focusing on increasing ride frequency.

• What is the current user retention rate and average rides per user?

• Why it matters: Indicates whether there's more opportunity in retention or acquisition.
• Hypothetical answer: 60% monthly retention, 8 rides per active user per month.
• Impact: If retention is low, it might suggest focusing on increasing ride frequency.

• What are the unit economics for new user acquisition vs. increasing rides for existing users?

• Why it matters: Helps determine the most cost-effective growth strategy.
• Hypothetical answer: New user CAC is $20, while the cost to increase rides for existing users is $5 per additional ride.
• Impact: Lower cost for existing users might favor increasing ride frequency.

• Are there any regulatory constraints or upcoming policy changes that could impact growth strategies?

• Why it matters: Regulatory environment can significantly affect expansion plans.
• Hypothetical answer: No major regulatory changes expected in the next 12 months.
• Impact: Stable regulatory environment allows for more aggressive growth strategies.

• What is the current product roadmap and available resources for either initiative?

• Why it matters: Aligns the decision with existing plans and capabilities.
• Hypothetical answer: Resources are split 60/40 between user acquisition and retention initiatives.
• Impact: Current resource allocation might need adjustment based on the chosen strategy.