Pathao Case Study: It’s All About Marketing
Over the past couple of years, the Bangladeshi company Pathao has pretty much taken over the ride-sharing market in Nepal. If you are an old-time user like me, you know that the scene wasn’t the same 2-3 years ago. We all originally started with Tootle, who didn’t have a competitor in the ride-sharing space. Enter Pathao in 2018, the customer base swiftly moved over to the new app. Given that the market was and still is in its infancy here in Nepal, the takeover may not be that big a deal to some. But even so, to be able to not just attract new customers but actually steal Tootle’s users too is quite commendable.
So how exactly was Pathao able to so quickly capture market share in an already established monopoly, and actually beat its competitor? I will discuss some of the market strategies they used to achieve this and how you can hopefully integrate that into your own business.
Table of Contents
I think we can all agree that Pathao has a very user-friendly and easy to use app. There are seldom any bugs and the process of signing up as a rider or a customer is pretty streamlined. Since the company already had experience in the Bangladeshi market, it was able to deliver a finished product, so to say, it Nepal. This meant no unnecessary lag or forced closure while using the app. The GPS is also very accurate and updates frequently (although the performance depends on your device too). User experience is a cornerstone of any successful app, and they nailed it.
PROMO CODES/ OFFERS
As soon as you sign up to Pathao, you are greeted with a Rs 50 offer. Back in the day, it was ten Rs 50 discounts for every new user. If you recommend a friend you would get a discount too. They have scaled it down now, but in the beginning stage, this was crucial. For context, let me contrast this to tootle’s, discount model. Tootle used “tootle balance” i.e you would get a certain balance amount for every ride you take. This is not a very attractive offer, especially to new users. Customers want discounts at hand, they find it alluring and are more likely to recommend it.
The company’s promo code model hence resulted in people recommending other people to join. This was in addition to just normal occasional promo codes they offered which was there to keep customers using the app. Back in 2018, their promo codes were extensive, I would have a discount pretty much every time I wanted a ride. This was the reason I, and thousands of others switched over from tootle.
There are several ways Pathao advertised its product. I will discuss digital marketing later, in this section we are focusing on text messages and traditional advertisement.
Pathao regularly sends text messages to its customers to remind them of their app. Even now, under the ruse of caring and whatnot, they find ways to keep you involved with their app. Notifying users of promo codes, app updates, traffic updates, and so on meant users actively saw their brand pop up in their phones. This led to more propensity towards using the app.
Pathao’s marketing campaign was highly targeted and it extensively sponsored a lot of youth and school events. Again, having a stash of money in their hand helped, but targeting effectively was a huge part of it. Instead of just putting up billboards everywhere they could, they sponsored shows and events their likely customer base regularly interacted with.
Although Pathao found unique ways to traditional advertising, the defining character of Pathao’s marketing strategy was digital marketing. It was actually among the first apps in Nepal to actively use Facebook and Instagram advertising to their benefit. Digital marketing has tons of benefits among which perhaps the most important is targeted ads. Pathao absolutely exploited this and grew their customer base exponentially.
Pathao would meld their offers with their digital ads, they would show customers their attractive offers and lure them. Not just customers, Pathao put together interesting bonuses for its riders too. This led to riders preferring Pathao over tootle gradually shifting the market share towards them. Let this be a testament to your own business, use digital marketing to its full extent, its powers are extraordinary.
Expansion to four wheeler
Pathao has now expanded to the four-wheeler and is quickly establishing a monopoly in that market too. This new expansion also helped grow their two-wheeler customer base as customers tend to prefer using the same product for different things. Since other apps like Tootle don’t provide four-wheeler rides, customers will have to download Pathao. Once they download Pathao, they start using it for two-wheelers. In this way, users will shift to Pathao from other apps resulting in a huge customer base for Pathao.
Pathao entered the Nepali market at a time when young people were increasingly looking for part-time jobs. The company capitalized on this idea and extensively marketed its employment opportunities too. They provided ease-of-use as well as attractive bonuses to employers. This led to riders shifting from Tootle to Pathao or at least using both. Its marketing strategy wasn’t just targeted on consumers, it was targeted on service-providers too. This helped them boost forward with more riders and a greater share of the market.
If you liked this, read more of our case studies here, here and here.