Acquisition project | Rapido

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Acquisition project | Rapido

Introduction

Rapido is a household name today, but predominantly as a bike taxi platform. Rapido Auto services were launched 5 years ago and cab services a year ago. I have chosen Rapido Auto marketplace for Bhubaneswar as my project. In Tier 1 cities, Rapido Auto would be at the mature scaling stage, but the reason why I have tagged it as an early scaling stage is because the penetration of the category is 29% which means there is a lot of room to scale up. Also, customer acquisition campaigns were done predominantly during city launch and then sporadically a few times over the past 5 years. Also Rapido Auto just owns 15% of the market share as well. These are the main reasons why I chose it to be at the early scaling stage.

Why Rapido Auto??

Predominantly we have seen a few driving factors while considering options for commuting in the city. Let's take a look at them:

	Bus	Cab	Bike Taxi	Offline Auto	Rapido Auto
Pricing	Lowest	Highest	Low	High	Medium
Safety	High	High	Low	Medium	Medium
Travel Time	High	Medium	Low	Low	Low
Door Step Pick up	No	Yes	Yes	No	Yes

Understanding that the people in the city want door step picked up safe rides with decent costs and reach the destination on time, Rapido Auto gives the benefit.

Compared to the competition:

Ola and Rapido have the same per km charges so more or less the customer gets the same pricing. But getting a ride is also a function of captains accepting rides. The fundamental motivator for this is how much the captain makes. Rapido Auto is on a no-commission model but Ola charges close to 15% commission, so with the same rate card Rapido Auto pays out more to the captain. In the case of Uber, they too run a no-commission model, but Rapido Auto's rate card is slightly better giving the edge there as well. In both cases, Rapido Auto captains end up making more for the same ride. This leads to better acceptance and customers gets rides fulfilled with Rapido.

Why acquisition is important at the current stage

In January 2024, the market was facing poor quality of supply, leading to a lot of frustrated customers and in turn high churn. This was solved by running multiple initiatives to improve the overall quality of supply leading to better fulfillment levels. This has led to a new challenge of lack of demand for the current base of supply.
Monsoons are expected in early July, which means some customers will step out only if they need to, resulting in a dip in rides. Thus, adding more to the ToFu will help me maintain my marketplace if not scale up during the monsoons. These acquired new customers will help me scale up the market post monsoons through the festival season and New Year's.

TAM

I have calculated TAM from a supply point of view.

Total number of registered autos (data from RTO)	27,000
Average ticket size (internal data)	108
Average daily income needed for a captain (from captain VoC)	1200
Expected number of rides in a day per captain	1200/108=11
Total number of rides in a day if 25% of autos run in a day	(27000/4)*11=74,250

From the 25% of autos that run in a day, there are many routes where these autos run in the shared ride concept, which according to captain VoCs, contributes to half a day's work. This makes my SAM, 74,000/2 (for half the day) = 37,000. Targeting a 25% market share, my SOM would be 9,250 rides per day. With the current run rate, this can be made possible only through customer acquisition, customer retention, and improved customer repeat sales. For my project, we will discuss customer acquisition alone.

Growth avenues - Use Cases

Bhubaneswar is an upcoming IT hub in India. We have seen a considerable number of companies investing in the area. According to my research, 3 major IT parks are hosting over 40,000 employees. Office commute is a top use case in the city.
10 major hospitals span across Bhubaneswar, which includes the famous AIIMS Bhubaneswar and KIMS. It is estimated that these major hospitals have a daily average footfall of 20,000. We want to target only OPD patients for acquisition, the footfall across these 10 hospitals for OPD is around 15,000 every day. Another observation is that around 60% of these patients are from lower-income backgrounds.
Bhubaneswar boasts a top range of educational institutions, like the IIT, XIM, KIMS, etc. Considering top schools, colleges, and other educational institutions, over 60,000 students study here. Considering a fair average of 10:1 ratio for student: faculty (and other staff) which takes the count to over 65,000.
Bhubaneswar has 4 railway stations and 6 major bus stations. The average footfall through all these hubs is over 1,50,000 every day.
Apart from these major use cases, commercial spaces across the city catering to the young and growing IT crowd, other marketplaces for wholesale business, people out running errands, etc. also will add to this list.

Challenges

The budget for ATL or BTL campaigns is very minimal as we just concluded the IPL Campaign.
We are operating as a SaaS model, which means we are currently a demand discovery platform for auto drivers, thus we do not take any money from any transaction between a customer and a captain. This removes the levers of discounts.

ICP

	ICP1	ICP2	ICP3	ICP4
Who	Employee	Parents traveling to the hospital either alone or taking a family member	College Student	Outstation Traveller visiting Bhubaneswar
Age	21-30	30-60	16-20	20-50
Income	20-50k /mo	household income <30k /mo	Pocket money - monthly 5k	<50k /mo
Occupation	IT	Any	Student	Any
Lives with	flatmates, family	Family (dependants)	Parents	Alone or with flatmates in Bhubaneswar
Dependant	No	No	Yes	No
Where do they spend most of their time	40-50 hours on weekdays at work. 8-10 hr over the weekend out with friends at commercial spots like malls, cinemas, and restaurants. Free Time - Instagram, FB, LinkedIn, OTT, youtube	60 hours a week at work Weekends are spent at home or shopping for provisions and essentials. Free Time - FB, Instagram, TV	30-40 hours at college Weekends - chilling with friends, Tuition centers, Sports/extracurricular activities Free Time - Instagram, FB, OTT, TV, youtube	If he is working in Bhubaneswar, 60 hours on weekdays, and weekends he would go back. If he is visiting someone, then at their place predominantly but also at restaurants, malls, and other marketplaces. If he is attending a function then at the venue.
Where do they spend their money?	Rent, Food, Commute, Entertainment, emis, SIPs.	Rent, emis, provisions and essentials, commute, kids fees, medical bills.	Study material, phone recharge, commute, snacks, movies	Commute, food, lodging.
Options for Commute	Own vehicle, with a friend, offline auto, online auto/bike, Bus.	Borrowed vehicle, Auto - offline and online, Bus	Walk, cycle, bus - public/college, with a friend on a bike, bike taxi, auto-offline/online.	Bus, auto, cab, traveling with the friend he is visiting.
Frequency of rides	4-10 times a week	1-3 times a month	10 times a week	At least twice a week but can go up to 5 to 6 times a week.
Pain points	Generally wouldn't have enough money or salary bracket to get an own bike. Depending on a friend comes at the friend's convenience. Offline auto drivers ask for exorbitant amounts and have to haggle. Busses take too much time.	A borrowed vehicle is always a risk, in terms of damage and then the incurred costs. Busses take a lot of time. Offline auto requires you to go to the nearest auto stand or wait in front of your home expecting an auto to come up soon, too random.	Walking and cycling are tiring. Busses are scheduled and take a lot of time. Bike Taxi looks cheap.	With luggage getting in and out of buses is a task. A lot of luggage means a cab, which is expensive.
Top priorities while choosing a ride	Affordability and availability	Affordability and availability	Status and availability	Affordability and availability

ICP Prioritisation framework

	Adoption Capacity	Frequency of Usage	Appetite to pay	Distribution potential
ICP1	Very High✅	High✅	Very High✅	High✅
ICP2	Medium	Low	Medium	Medium
ICP3	Very High✅	Very High✅	High✅	High✅
ICP4	Medium	Medium	High✅	Very High✅

Based on the framework above, taking adoption capacity, frequency of usage, and the appetite to pay as the top priorities, we can conclude that ICP1 and ICP3 qualify.

Core value proposition and JTBD

The core value proposition: easily available commute options at affordable rates. In similar terms, JTBD would be able to reach point A from point B faster and economically.

Current Acquisition Channels

Currently Paid Ads through Google is the only channel we use. There is no strategy behind this and we allow Google to run its algorithm without any direction from us. On a weekly average, we generate 500 FTUs (First Time Users) at a CAC of 100. Organically through word of mouth, we get a weekly FTU count of close to 3000.

Channel	Cost	Flexibility	Effort	Reach
Search	Low	Low	Medium	High
Influencer Marketing	Medium	Medium	Low	Medium
Paid Ads (FB, Insta)	Low	High	Low	High
Referrals	Low (Paid after revenue is generated)	High	Low	High
Product Integrations	Low	High	Medium	High
Offline (e.g., OOH)	Very High	High	High	Low (Localised)

Reaching as many customers is crucial as it is early stage.
With a decent cost and high flexibility, I am looking to build on Paid Ads, Referrals, and Product Integrations as acquisition channels.

Acquisition Experiments

1 - Paid Ads

ICP1 and ICP3 spend their free time on Google, Instagram, Facebook, YouTube, and OTT channels like Amazon Prime, Disney Hotstar, and Netflix.

Channels to be considered:

Channel	Cost	Effort	Flexibility	Speed	Scale
Google	Low	Low	High	High	High
Facebook/Instagram	Low	Medium	High	High	High
YouTube	High	High	Medium	High	High
Other online ad platforms	Medium	Low	High	High	Low
OTT Channels	High	High	Low	Low	Low

Low cost and high scale with close to minimal effort are the top parameters to be considered. Thus, Google, FB, and Instagram are the channels that qualify.

CAC Ratio:

Overall costs would be 9 Lacs for 6 weeks and the expected new rides from the new customers is around 5-6K. Then the CAC would be 9,00,000/6000 = 150.

CAC Ratio: Expected CAC is 150. LTV would be 100 (ATV) x 20 (avg. rides per month considering 5 rides a week for both ICP1 and ICP3) x 1 (avg. churn time in months), which is 2000. CAC Ratio = 2000/150 = 13.33. This is an excellent CAC ratio.

Whom and where to target:

Age group: 16-30 years.
Location: Patia, Nelladri Vihar, Shaheed Nagar, KIMS, Utkal University, and Nayapalli clusters.
Interests: Fashion, travel, movies, food, sports.

2 - Referral Programs

What is Rapido currently running?

In the past 2 years of working with Rapido, and being a regular customer as well, I have not seen any pop-up asking to refer someone to the platform.

In the hamburger menu, on the customer app, there is an option to refer and earn. Clicking on that takes the customer to the referral page.

There are two problems here:

To refer someone, the customer has to go to the hamburger menu.
50 Rupees is in the form of coins - the platform currency here. But coins can only be used in Bike Taxi rides.

The new version of the referral program 😎:

Brag-worthy feature of Rapido Auto: Booking to pick-up time was less than 5 minutes.

When and whom to ask for a referral:

When the brag-worthy ride happened and the ride was given a 5-star rating.

Discovery:

When the customer gives a 5-star rating, a pop-up message 'Thank you! and share your joy' will be shown. It will be a button, but when clicked it will take the customer to the referral page. The referral page will remain the same.

Referral bonus:

If the referee does one ride, then the referrer gets flat 20% off on his next ride (with a cap of 25 Rupees).

Tracking:

Tracking will be available on the referral page. As of now, no tracking is done on the app. This will have to be integrated into the app so that the referrer knows if the referee has done a ride or not.

3 - Product Integration

Book My Show

What is currently happening?

Across 10 cinemas, with 5 screens on average, 4 shows a day with 120 tickets sold (200 seats available on average and 60% occupancy) we see 7.2 Lac tickets sold in May in Bhubaneswar. Out of these over 60% is sold online, which gives us 4 Lac tickets sold online. BMS has a 75% market share which means over 3 Lac tickets are sold through BMS. Customers book tickets and figure out a way to reach the cinema.

Enter Rapido 🛺

On the page which shows the movie ticket, there will be a button called 'Book me a ride'.

Clicking on this button, the customer is redirected to a page that is basically a Rapido-integrated page. It will have a similar theme to BMS, but it will be a Rapdio booking page. Note, that here drop location is already populated based on the cinema where the movie ticket is issued.

In the backend, we will have to track BMS-integrated rides separately. The customer will be able to track the ride and use basic features only through this integration. Once, the ride is completed, the customer will be prompted to download the Rapido App for future rides.

What is it in for BMS?

Fari question. Rapido customers will be given a flat 15% off on BMS ticket purchases (up to 45 Rupees) with once a month usage limit. This will only be given to customers who have a weekly RPC of 2 or more in the past 4 weeks. Also, BMS gets its brand exposed to Rapido customers (all categories) with the marketing of the cross-utilized offers.

MoBus

What is MoBus?

MoBus is a government bus service across the state run under CRUT (Capital Region Urban Transport). CRUT has launched e-buses as a step towards promoting green mobility. MoBus has over 3 Lac footfalls in a day and they cater to Bhubaneswar, Cuttack, Puri, Jatni, and Konark.

Where do we come in?

Every day 3 Lac customers travel on MoBus, out of which 22% are booking tickets through their app, which is 66K travelers in a day. Now Mobus runs on 13 routes spanning over hundreds of kilometers from Cuttack to Jatni to Puri to Konark. So all customers have to reach their nearest MoBus stops to access the service. As it is online, they can track the movement of the bus on the route enabling them to plan their FM (first mile) commute. Rapido Auto will be the solution for this. Also, before reaching their destination MoBus stop, customers can have their Rapido Auto booked and ready for pick up, solving for LM (last mile).

How?

Once the customer has purchased his MoBus ticket, he will be prompted 'Reach <bus stop name> within <x minutes> using Rapido App' (Note that, the customer has already given location permission for MoBus app, thus calculating ETA would be easy). This prompt will have a link to download the Rapido App.

Cross Utilization

Rapido will have promotions of MoBus on the Rapido App encouraging users to download and use MoBus to increase their app usage which is currently around 22%.

Brand Trust

CRUT is widely respected across the city, thus any tie-up or partnership with CRUT is always considered trustworthy.

Done. Thank you!