Is it better for Gojek to focus on increasing order frequency or average order value for GoFood?

Introduction

The trade-off between increasing order frequency and average order value for GoFood is a critical decision that could significantly impact Gojek's growth strategy. This scenario involves balancing short-term revenue gains with long-term customer retention and platform sustainability. I'll analyze this trade-off by examining key metrics, stakeholder impacts, and potential experiments to inform our decision-making process.

Step 1

Clarifying Questions (3 minutes)

• Based on GoFood's current market position, I'm thinking there might be specific growth targets we're aiming for. Could you share our current market share and growth objectives for the food delivery segment?

Why it matters: Helps align our strategy with overall business goals Expected answer: Targeting 30% market share, 20% YoY growth Impact on approach: Would influence whether we prioritize rapid expansion or profitability

• Considering user behavior patterns, I'm curious about our customer segmentation. Can you provide insights into our most valuable user segments and their ordering habits?

Why it matters: Allows for targeted strategies that cater to high-value customers Expected answer: Young professionals and families are key segments Impact on approach: Would shape personalized approaches for increasing frequency or order value

• From a technical standpoint, I'm wondering about our current app capabilities. What personalization features do we currently have in place for order recommendations?

Why it matters: Determines the feasibility of implementing sophisticated recommendation algorithms Expected answer: Basic personalization based on order history Impact on approach: Would influence the complexity of strategies we can implement

• Regarding our resources, I'm thinking about our marketing budget allocation. How flexible is our budget for user acquisition versus retention campaigns?

Why it matters: Affects our ability to drive either frequency or order value through marketing efforts Expected answer: 60% acquisition, 40% retention, with some flexibility Impact on approach: Would guide the balance between attracting new users and encouraging existing users to order more

• Considering timeline pressures, I'm curious about any upcoming competitive threats or market changes. Are there any significant events on the horizon that could impact our strategy?

Why it matters: Helps prioritize short-term tactics versus long-term strategies Expected answer: New competitor entering the market in Q3 Impact on approach: Might necessitate a more aggressive short-term focus on either frequency or order value