Product Management Interview: Zomato conversion is down, how would you go about it? [Root Cause Analysis Question]

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Interviewer: The conversion rate of Zomato is down; how would you go about it?

Shailesh: Okay, before I jump on to the solution, First, let me clarify my understanding of Zomato so that we are on the same page. Zomato is a platform where one can order food online and book a table in restaurants; It’s a one-stop for the one who is looking to have some food.
Interviewer: Okay

Shailesh: I have some questions which I want to get clarified; my first question is what does it mean by conversion rate? As per my understanding, it is the ratio of the number of people ordering the food to the number of people opening the Zomato. What is your take on this?
Interviewer: Yes, correct, many users are not ordering the food; some are even adding to the cart but not ordering.

Shailesh: Okay, I am assuming that we haven’t changed the metric calculation in the near time. Also, the BI tool we are using for tracking metrics is showing the metric correctly.
Interviewer: Yes, the BI tool is working fine, and we haven’t changed any calculations.

Shailesh: For how long do we see this issue? Do we see some tend or seasonality?
Interviewer: We have been seeing this for the last one week. It is a gradual change, and we see this trend at lunchtime.

Shailesh: Alright, I am assuming that we do not see this kind of issue while ordering dinner or breakfast.
Interviewer: No, we are only observing this issue during lunchtime.

Shailesh: Is there any particular geography and demography in which we see this trend?
Interviewer: We see this issue primarily in young people.

Shailesh: Okay, the way I would like to go about it is, first I will look into internal factors, look into external factors and lastly will see if there is any shift in consumer behaviour. If we find some potential issue will mark it; at last, we will dig deeper into the potential problem.
Interviewer: Please go ahead.

Internal Factors

Shailesh: Have we seen this kind of fall in conversion in any specific device like Desktop or mobile (Android vs iOS)?
Interviewer: We have seen this kind of fall across all the devices.

Shailesh: Is there any kind of server issue, which is unlikely to be the case because the conversion rate only falls at lunchtime. I am just asking this question for a sanity check.
Interviewer: No, our servers are on the cloud, and the infrastructure is scalable.

Shailesh: Have we released any new features or done some UI changes? Because it may happen that due to new UI change, they may find it a bit inconvenient to order.
Interviewer: We haven’t shipped any feature to production in recent time.

Shailesh: At what stage of the user funnel, i.e. cart page, payment page etc., we are seeing users dropping off?
Interviewer: The majority of the people are not even ordering the food; some of them add items to their cart but don’t order.

Shailesh: I am assuming that there is no disparity among the coupon codes/discount at breakfast, lunch and dinner time?
Interviewer: No, there is nothing like this.

External Factors

Shailesh: Alright, let me look at some external factors. Since many offices are opening, the traffic in the city is rising, which may cause a rise in the ETA, which may be one reason.
Interviewer: Yes, the ETA is slightly higher at lunchtime, but the conversion rate is below pre covid era.

Shailesh: Have we changed the delivery policy or something like taking a higher commission from the delivery executives at lunchtime?
Interviewer: No, we haven’t changed any delivery policy.

Shailesh: Is our competitor running some deep discount on food at lunchtime, so our users are shifting to our competitor?
Interviewer: Discounts are always there on every platform, but we haven’t seen this low conversion rate.

Consumer Behaviour

Shailesh: Okay, now let’s see the consumer behaviour; I think young professionals are the ones who are mostly the driver of ordering food at lunchtime. The ones who are working in corporate offices. Since many offices are reopening and people have started going to the office. They may get bored of ordering food from Zomato while working from home and may want to socialise while eating. Socialising is the one thing everyone has missed, like eating together at the same table with colleagues. Many tech parks also have a policy; they have currently operated on restricted entry. So even if a person orders food from Zomato, they will have to walk to the exit of the tech park to get the food parcel which may be a bit convenient.

I would like to measure two metrics to get assured.

Metric-1: Conversion rate on weekdays

Metric-2: Conversion rate at weekends.

So if the conversion rate at weekends is much higher than at weekends, this can be the likely issue.

Interviewer: Yeah, we have seen a similar trend as well. You have identified the correct problem. But how will you give a solution to it?

Solutions

Shailesh: Since getting an order at the same time is the real pain, we can think of the following pain points

1. We can run corporate offers on some good restaurants so that all people can order from the same restaurant at a much cheaper rate.

2. We can establish Zomato owned outlet for selected items in the cafeteria of a particular company.

3. We can have a cloud kitchen installed in the tech parks. This cloud kitchen will be an umbrella for some famous brands that aren’t present in the tech parks.

4. We can have a “Make your Vending machine”, where you can make your food. For example, you can select Pizza; the vending machine will automatically make Pizza and give it to you. You just have to scan the barcode on the vending machine from the Zomato, and all discount coupon codes will be applicable there.

I think solutions #2, #3 and #4 have a significant impact but the initial cost required to implement them is also high. We can now run the corporate bulk discounts or corporate packages, and in the long run, we can think of having a cloud kitchen in the tech park or tie-up with some company to set up a stall in the cafeteria.

Interviewer: Yeah, we can do that, thank you.

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