Engagement & Retention project | Otipy
Otipy - From Farm to Home in 12 hours
Core Value Proposition
In a crowded e-commerce and quick commerce market, Otipy is trying to stand out with its promise of delivering fresh produce within 12 hours. It offers home delivery of fresh fruits and vegetables directly from farms at low cost and high traceability. Additionally it ensures that the produce is free of any harmful chemicals.
The core value proposition for Otipy is to Wake up to farm-fresh produce: Responsibly grown by partner farmers, harvested daily, and delivered straight to your door by 8 AM.
Founded in 2020 as a consumer arm of the agritech startup Crofarm, Otipy aims to reduce food wastage and improve supply chain efficiency by utilizing AI-driven demand forecasting tools. This approach allows the platform to predict the right amount of produce needed, ensuring that items are harvested and delivered within approximately 12 hours of order placement
The platform primarily utilizes a network of resellers, predominantly women, to facilitate this farm-to-fork model, which emphasizes sustainability and minimal food waste through AI-driven demand prediction tools.
The Otipy model operates with three key stakeholders in its ecosystem - farmers, resellers, and consumers - each receiving distinct value propositions. Below is the value proposition for each stakeholder.
How do consumers experience the core value proposition of the product
- Fresh Produce - Users appreciate that produce received in the morning appears to be freshly picked, which aligns with Otipy's promise of farm-to-home delivery. The fresh produce also helps with better shelf life of products compared to regular markets.
- Convenience - Convenience of ordering through the app and early morning deliveries before the food is prepared is a significant benefit. Users enjoy the ability to receive fresh produce directly at their doorstep, which saves time compared to visiting local markets.
- Subscription - It offers a subscription service that allows customers to receive regular deliveries (daily/alternate days/weekly/custom), making it easier for them to maintain a steady supply of fresh produce.
- Traceability - Time and location of harvest adds an element of traceability and also ensures that users know reliably that it is being harvested freshly.
- Food Safety - Otipy ensures that they source produce only from verified farms where soil quality and pesticide usage are rigorously tested by their team. This quality assurance provides a significant advantage over traditional mandis, where such safety standards and testing protocols are often absent.
Comparison with Competitors
Otipy differentiates itself from other players in the online grocery delivery space such as Milkbasket, BigBasket, Blinkit, and Zepto through its unique operational model and focus on community engagement. Here’s a comparative overview:
Feature | Otipy | Milkbasket | BigBasket | Blinkit | Zepto |
|---|---|---|---|---|---|
Business Model | Subcription & Direct | Subscription-based | Direct e-commerce | Quick delivery service | Instant delivery |
Delivery Time | ~12 hours | Next day morning | Next day, Within minutes (BBNow) | Within minutes | Within minutes |
Product Range | Fresh produce (certified by labs), groceries | Groceries, Limited fresh produce (not certified) | Extensive groceries, Fresh produce | Groceries, Fruits Vegetables but not fresh | Groceries mainly |
Sourcing | Resellers (community-based) | Mainly direct | Mainly direct | Direct and partnerships with suppliers | Direct and partnerships with suppliers |
Sustainability Focus | High (demand harvesting) | Moderate | Moderate | Low | Low |
Natural frequency of the product
- Primary frequency: Weekly (most households shop for fresh produce weekly as per Otipy)
- Secondary patterns: Daily for some subscribers who are using wallets, Bi-weekly for users who are using it occasionally along side local vegetable market for their regular needs.
Sub-products and their natural frequencies:
- Fresh fruits & vegetables (mostly weekly)
- Groceries & staples (mostly monthly)
- Dairy products (mostly 2-3 times a week with a significant percentage of user subscribing to it daily)
- Ready-to-cook items (weekly/bi-weekly)
Engagement framework
Dimension | Key Tracking Metric | Selected | Rationale | |
|---|---|---|---|---|
Frequency | Number of orders placed per month | Primary | Since the quality of product varies in fresh produce, Indians have a low trust for sellers in this category. Higher frequency indicates loyalty and trust: | |
Depth | Average order value | N/A | While order value is important, it may not always reflect true engagement as it can vary based on seasonal needs, family size and kind of products (local vs imported) they prefer. | |
Breadth | Number of different categories purchased from (e.g., vegetables, fruits, dairy, groceries) | N/A | Category diversity, while useful to track, isn't the primary indicator of engagement as users may be highly satisfied using Otipy for just fresh produce, which is their core offering. |
Definition of active user
Defining an active user as someone who places at least 2 orders in a rolling 30-day period would be most appropriate for Otipy.
Rationale:
- For new users, 1 order may be just for trial. 2nd order indicates value realised. We don't want to count someone as active users just because they tried the produce once.
- Some users might split their produce shopping between Otipy and local markets (use case seen frequently). We may want to include them as they see Otipy as an alternative to local markets (for fresh produce)
- It accounts for occasional gaps in ordering
- It captures both weekly and bi-weekly shoppers
Based on the user interviews done, it seems that the best segmentation can either be done basis either the frequency of orders or on the basis of AOV. Although users give the rough AOV, it may vary basis the items ordered and is dependent on number of people in the household. Frequency of orders seems to be the best and easiest way to segment the users.
USER INTERVIEWS
Some key insights from the user interviews:
- Payment Behavior Patterns:
- Interesting split between wallet and direct payment users
- Wallet users obviously tend to be more regular customers
- Those who complain about minimum order tend to use wallets more. This came as a surprising find. Wallet users felt that since they have already given so much money upfront, why is there a need to have minimum order for zero delivery fee. One reason could be the expectation that wallet recharge = membership and members should not be charged a delivery fee even for smaller orders.
- Discovery & Adoption:
- Strong word-of-mouth influence (neighbour recommendations, building groups)
- Family influence significant (sons setting up for parents)
- Ordering Patterns:
- Regular Planners: Fixed weekly routines (especially retired couples)
- Need-Based: Order when running low or reminded
- Frequent Small Orders: Especially joint families
- Emergency Users: Use multiple apps including quick commerce
- Key Pain Points:
- Quality and weight consistency
- Minimum order value (mentioned frequently) especially since fresh produce in some cases is not worth Rs. 100 every day.
- Delivery timing/slots. Late delivery is a challenge if the families are using the produce for breakfast.
- Product availability/stock-outs happen frequently.
- Notable Behavior Patterns:
- Most users maintain multiple grocery sources
- App preference varies by age/tech comfort
- Quality expectations linked to previous shopping habits
- Price comparison common among younger users. Price comparison generally in packed items and not in fresh produce.
- Loyalty Drivers:
- Consistent quality is the biggest driver of loyalty in fresh produce. Customers are skeptical because they cannot touch and see unlike in a local vegetable market. Moreover since other quick commerce apps face these issues regularly, this is one area where Otipy can differentiate itself.
- Convenience of home delivery
- Time savings
- Wallet benefits
Ideal Customer Profile (based on the above)
Parameters | CASUAL (Emergency Based) | CORE (Need Based) | POWER (Regular Planners) |
|---|---|---|---|
Age | 28-35 | 35-45 | 45-60 |
Profession | Product Manager, Marketing Executive | IT Professional, Homemaker | Experienced professionals, Senior Homemakers |
Location | Gurgaon/Noida apartments, Bachelor accommodations | Established residential areas, Family apartments | Premium societies, Older Delhi colonies |
Details of Profile | Single or newly married professionals. Order when regular quick commerce apps disappoint in quality. Use multiple apps and order based on convenience. Late night ordering common. No fixed routine. | Nuclear families with kids or joint families. Order when inventory runs low. Prefer fresh daily needs vs bulk buying. House help or family member checks fridge regularly. Quality-conscious but price sensitive. | Traditional quality-conscious families. Fixed weekly menu planning. Order same items regularly. Value system and routine. Often recommend to neighbours. |
Frequency | 1-2 times/month | 2-3 times/week | 3-4 times/week fixed schedule |
How long using Otipy | 6 months - 1 year | 1-2 years | >2 years |
AOV | ₹500-800 (minimum order value) | ₹300-400 | ₹200-300 |
Breadth of categories | Basic vegetables, fruits | Fresh produce, dairy, basic grocery | All categories including organic, premium fruits, dairy, grocery |
What they like in Otipy | Better quality than quick commerce, easy refunds | Consistent quality, no-questions-asked returns | Fixed delivery time, wallet benefits |
What they don't like in Otipy | Minimum order value, need to plan ahead | Quality variations sometimes, delivery timing changes | Limited exotic range, Frequent stock-outs |
Otipy wallet users | No | Yes | Yes, regular users |
Engagement campaign #1 - Family Savings Campaign
Goal Of Campaign | Convert to wallet usage. Wallet usage is a very good indicator of future engagement. |
|---|---|
Type Of user | Core and Casual User |
Hypothesis | Core users who experience significant monthly savings through wallet will shift to power user behavior. |
Pitch/Content | 1)Push Notifications Headline - Your Rs 300 bonus is waiting! Your family spent ₹3000 last month. Load wallet with ₹3000, get ₹3300 in value! 2)WhatsApp Hi Meeta! 👋 We noticed you spent ₹3,000 on fresh groceries last month with Otipy. 📊 Here's an exclusive 24-hour offer for you: ➡️ Load ₹3,000 in your Otipy wallet ➡️ Get ₹3,300 value (₹300 bonus!) ⏰ Offer valid till midnight today Click here to load your wallet: [Link] Don't miss out on your ₹300 bonus! 🎁 3) In-app banner with a clock and last month's spend so that users don't feel that they will have their money stuck in the app.
|
Channel of Distribution | WhatsApp, In-App Banner, Push Notifications |
Offer | Load money in wallet. Get 10% extra. |
Frequency & Timing | Push Notifications & WhatsApp Messages in the evening between 7 and 9 PM when most people are thinking about next day's plan. |
Success Metrics |
|
Engagement campaign #2 - Category Discovery Campaign
Goal Of Campaign | Convert non-regular users to regular users by nudging them to categories which are typically bought daily |
|---|---|
Type Of user | Core and Casual User |
Hypothesis | Users who add dairy to their vegetable orders are more likely to become frequent users because:
|
Pitch/Content | 1)Push Notifications Headline - Your free Farm-tale premium malai paneer awaits! Add veggies worth ₹600, get premium buffalo milk paneer free! 2)WhatsApp Hi [Name]! 👋 Love your choice of fresh vegetables! 🥬 Here's something special: Get Farm-tale premium malai paneer (100% buffalo milk) worth ₹120 FREE with your vegetable order today!
Try our premium paneer, loved by 2,847 customers last week! Order now: [Link] Valid only for next 24 hours ⏰ 3) In-app banner
|
Channel of Distribution | WhatsApp, In-App Banner, Push Notifications |
Offer | Free paneer (dairy product) on vegetable orders above ₹600 |
Frequency & Timing |
|
Success Metrics | Primary:
Secondary:
|
Engagement campaign #3 - Never Run Out Campaign
Goal Of Campaign | PRIMARY GOAL: Convert core users (1-2 orders/week) to power users (3-4+ orders/week) through subscription adoption SUB-GOALS:
Target the following users:
|
|---|---|
Type of user | Core users who are ordering 1-2 times/week |
Hypothesis | If we demonstrate how subscriptions prevent the stress of running out of daily essentials while providing savings and convenience, users will adopt subscription for frequently purchased items. The subscription is a very good indicator of retention. |
Pitch/Content | 1)Push Notifications Headline: Your morning heroes, auto-delivered! 🥛 🍞 Content: Subscribe once, relax forever + save 10% 2)WhatsApp Hi [Name]! 👋 Love your regular orders on Otipy! ⭐ Make your mornings hassle-free: 🔄 Subscribe to daily essentials 💰 Save 10% on every delivery ✨ Auto-delivered every morning ⏸️ Pause/Modify anytime 🎯 Skip when you don't need Your Monthly Savings Calculator: 📊 Current spending: ₹3000 🎉 With subscription: ₹2700 💫 You save: ₹300! Popular Subscription Items: 🥛 Farm-fresh milk 🍞 Brown bread 🥚 Farm eggs 🧀 Paneer Start saving today: [Link] Limited period offer - Extra 10% off on first month! ⏰ 3) In-app banner
|
Channel of Distribution | WhatsApp, In-App Banner, Push Notifications |
Offer | Double refund on quality issues for any delicate/premium vegetables |
Frequency & Timing | Push Notification and WhatsApp: 7-9 PM (shopping planning for next day)
|
Success Metrics |
|
Engagement campaign #4 - Smart Auto-Recharge Campaign
Goal Of Campaign | The goal of this campaign is to keep the power users engaged so that they don't drop out because of payment friction. Target segment:
|
|---|---|
Type of user | Power Users |
Hypothesis | If we show power users how auto-recharge removes friction from their regular ordering routine and offer a small but consistent bonus, they'll adopt it for convenience rather than just the incentive. |
Pitch/Content | 1)Push Notifications Headline: Never run out of wallet balance again! Content: Set up auto-recharge, get 5% extra on every recharge 2)WhatsApp Hi [Name]!👋 Never let low wallet balance interrupt your shopping: Set up auto-recharge
Your Suggested Setup:
Setup now: [Link] Offer for limited period only ⏰ 3) In-app banner on wallet page
|
Channel of Distribution | WhatsApp, In-App Banner, Push Notifications |
Offer | 5% extra on wallet auto-recharge setup |
Frequency & Timing | Push Notification and WhatsApp to all the qualified users. |
Success Metrics | Primary Metrics
Secondary Metrics:Campaign Engagement
User Behavior Changes
Financial Impact
|
Engagement campaign #5 - Otipy Super Saver Campaign
Goal Of Campaign | The goal of this campaign is to target the casual users who are ordering occasionally and are comparing across apps before ordering. Target segment:
|
|---|---|
Type of user | Casual Users |
Hypothesis | If we give casual users a consistent small discount (₹25) over multiple orders (20) with a time-bound activation (Feb 28th), they will:
|
Pitch/Content | 1)Push Notifications Headline: ₹500 savings on your next 20 orders! Content: ₹25 off per order. Offer ends Feb 28th 2)WhatsApp Hi [Name]!👋 Special offer for our valued customers 🌟 Get ₹25 OFF on your next 20 orders!
But hurry!
Activate your offer now: [Link] Start saving today! ⏰ |
Channel of Distribution | WhatsApp, Push Notifications |
Offer | Save ₹500. Complete 20 orders. Save Rs. 25 on every order. |
Frequency & Timing | Push Notification and WhatsApp to all the qualified users. (7 - 9 PM staggered over a week) |
Success Metrics | Primary Metrics
|
Retention Rate
Overall Retention for Transacting users
Data from Otipy Investor Presentation - Although a little dated, it gives a rough overview of the retention and how it is changing:
- The retention stands for M1 at ~50% and M12 at ~12%
- Otipy has been able to improve the transacting users’ retention in M1 from ~25% to ~50% in the past two years. (investor presentation)
- They have started urging customers to add a certain amount in the wallet to ensure stickiness of the customers which drastically improved the retention rates as expected. (source: investor presentation)
Subscriber Retention
Subscribers are the users who subscribe to a particular product being delivered on a regular basis (daily/weekly/monthly)
- The subscribers’ retention stands better than overall with M1 at ~80% and M12 at ~30% which is significantly higher than non-subscribers.
- This has been further helped by addition of Mother Dairy and Amul dairy items which acts as a pull factor and the user then also adds other items to the cart. (source: investor presentation)
Wallet Share (Overall)
The above is the data on overall wallet share/month.
- For the customers who are ordering from Otipy, they have increased their wallet share from M1 average of INR 824 to M12 of INR 987.
- This is expected to increase further with addition of more SKUs, especially in FMCG and HPC categories. (source: investor presentation).
Wallet Share (Subscribers)
- The subscribers’ wallet share stands better than overall with M1 at INR 1500 and M12 at INR 1630 which is significantly higher than non-subscribers.
- Even though it is significantly higher than non-subscribers, there is a large scope of improvement here as INR 1600 is also a small part of a household’s monthly spend on groceries (considering Otipy currently only operates in tier 1 cities)
Overall Average
- Data shows 6.5 orders/month average across all users
- 38% are subscribers (from latest data) and 62% are regular users.
- If we do a rough weighted average calculation
- Subscribers: ~12-14 orders/month
- Implied AOV: Rs 1532/13 = ~Rs 118
- Regular users: 3-4 orders/month
- Implied AOV: Rs 824/3.5 = ~Rs 235
- Regular users make fewer but larger purchases
- Subscribers make more frequent but smaller purchases (
- Weighted average: (38% × 13) + (62% × 3.5) = 4.94 + 2.17 = ~7.1 orders. Much closer to actual 6.5 orders/month
Based on typical Indian household consumption patterns and Otipy's product mix data showing 65% F&V contribution (investor presentation), we can calculate the rough breakdown for subscribers and regular users:
Key Retention Drivers
- Fresh produce dominates wallet share (65%) - quality critical as it represents majority wallet share. Additionally it is the only category which has a high variation in quality. Dairy and Bakery products are more standardized.
- Dairy/bakery drives frequency but lower AOV - builds habit Regular engagement through dairy/bakery helps maintain customer relationship
- FMCG has highest AOV but lowest frequency - opportunity for growth
- Subscribers order 3-4x more frequently than regular users.
Actionables
- Extensive focus on quality especially for fresh produce. Address quality issues of customers promptly.
- Convert users into subscribers (for milk, fruits & vegetables and coconut water delivery)
- Get more people to charge their wallet.
- Help them setup auto-recharge.
- Pre-load money into the wallet for 3-4 transactions to enable users to try and build a habit
- Add more SKUs (FMCG and HPC) – go from the current 1200-1400 to 9000-10000 SKUs to get more wallet share. Easy for customers to add a few items with their subscription without incurring additional delivery charge.
Otipy Retention Curves by Acquisition Channel
(Not actual data and based on lot of assumptions. We know for a fact that resellers who are also community leaders also get the customers through their community. As per the secondary research, the reseller CAC is the lowest at Rs. 8-10)
- Reseller network best with minimal CAC (0.5-1 month payback). SEO is the lowest but something we are unable to control.
- Referral shows good retention despite higher initial CAC
- Paid campaigns require longest payback period
Key insights
- SEO and Reseller network form the most efficient acquisition base
- Referral program delivers quality customers despite upfront cost
- Paid channels should be used selectively for specific growth objectives
- Focus should be on optimizing organic and community-driven growth
Churn and its reasons
Voluntary Churn Reasons:
- Product Quality Concerns
- Fresh produce quality inconsistency.
- 62% of the complaints received were about product quality
- Customers might leave if they consistently receive if they receive Unripe or overripe fruits, damaged vegetables.
- Price Sensitivity
- Customers might churn if:
- Prices are higher compared to local markets
- Perceived value doesn't match price point
- Competitive platforms offer better pricing and no perceived gap in value.
- Delivery Experience
- Delivery time and reliability issues.
- Complaints about:
- Order not delivered (12.25% of complaints)
- Items missing (6.35% of complaints)
- Weight issues (4.01% of complaints)
- We should address these issues promptly by refunding the money in wallet and ensuring that we fix those issues in the supply chain.
- Limited Product Range
- Currently around 1200-1400 SKUs
- Customers might leave if:
- Desired products are consistently not available
- Limited variety compared to competitors
- Lack of preferred brands or variants
Involuntary Churn Reasons:
- Relocation to a location outside Otipy's service area
- Health related reasons - eg. serious illness, hospitalization, extended medical treatment.
- Personal life changes - Marriage or divorce leading to household restructuring, Childbirth causing lifestyle disruptions, Moving in with family or parents etc.
- Economic Compulsions - Unable to afford regular purchases online now and looking cheaper local alternatives.
Negative Actions
A list of trackable negative actions for Otipy:
- Quantifiable Platform Engagement
- Decreased app opens
- A high reduction in time spent in app
- Fewer product page views
- Order-Related Metrics
- Decreasing order frequency
- Reducing average order value
- Increasing cart abandonment rate
- Subscription Indicators
- Subscription cancellation
- Reduced frequency of subscribed items
- Declining wallet money top-ups
- Decreased wallet balance utilization
- Notification and Communication
- Muting/blocking push and whatsapp notifications
- Reducing email/SMS open rates
- Low engagement with in-app notifications
- Support and Quality Signals
- Opening of support ticket
- Consistent low delivery rating
- Rising number of refund requests
- Negative app ratings
- Profile and Account Actions
- Removing saved addresses
- Product Interaction Tracking
- Narrowing product category selections
- Reducing product variety in orders
- Consistent ordering of minimal essential items
- App uninstallation
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