Growth Model Design Project | Licious

Overview:

The company’s current annual run rate (ARR) as of June 2024 is Rs 950 crore, a 22% (approx) increase from an ARR of Rs 770 crore in June 2023. It aims to touch an ARR of Rs 1,200 crore by March 2025.

North Star Metric:

In FY24, Licious aimed to go from 950Cr to 1200Cr in the next 12 months. The company is in mature scaling stage as the revenue growth has been plateued from past 2 years. So for Licious NSM would be revenue growth.

Growth Equation

Revenue = Paying customers * Avg. Frequency of orders * AOV

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Current Metrics:

Funnel rates	Specific numbers
Current monthly new users	60,000
Visit to signup rate	70%
Signup to 1st purchase rate	20%
1st Purchase to 2nd Purchase rate	33%
2nd purchase to 3rd purchase rate	10%
Retention rate - M3	45%
Activation metric definition	3 orders in 1.5 months
Retention metric definition	At least 1 order in 3 months
Current Frequency of casual users (per month)	2.1
Current Frequency of core users (per month)	4.23
Current Frequency of power users (per month)	6.1

Nuke Scenario:

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Incremental Growth:

Since retention is good enough, we need to look at other major levers to get the revenue impact we are looking for:

Acquisition:
1. Acquisition wont be constant her across all the months. There are about 100 festive days in a year, during which the consumption of meat is significantly lower than the rest of the days. In FY24, from July to Oct, the consumption will be less as there will Shraavan, Rakshabandhan, Janmaastmi, Ganpatipuja, Navratre and Diwali. So the acquisition will be lower in these 3 months.
2. Usually, the Licious sees significant organic growth from Nov-Jan and hence It will double down on paid marketing and other channel to acquire more users.
Onboarding Rate:
1. Based on the user insights and product insights, new users are not moving beyond after ordering 2nd order.
2. The current onboarding definition is atleast 3 orders in 1.5 months and the onboarding rate is 10%. Target is to improve it to 16%.
Engagement:
1. The purchase frequency growth for Licious is very slow from past 2-3 years. So in order to see the incremental revenue impact, we also need to improve the frequency of purchase across different type of users.

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