PM Interview Question → Amazon has noticed a 20% drop in daily active users in India. Find the Root cause?

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Bootcamp

5 min readJan 22, 2025

Imagine waking up to a 20% drop in daily active users (DAU) on Amazon India — that’s the kind of scenario that sends PMs scrambling. In a market as dynamic and competitive as India, such a dip can stem from multiple factors: market shifts, product issues, or external forces like economic trends.

The key to solving this lies in structured problem-solving and data-driven root cause analysis. In this article, I’ll break down the process a Product Manager (PM) can follow to diagnose the issue, identify the root cause, and implement corrective measures. This isn’t just about identifying problems — it’s about crafting actionable insights that drive recovery.

1. Frame the Problem

Before diving into solutions, it’s essential to clearly define the scope of the problem:

What’s the observed issue? A 20% drop in DAUs.
Where is the decline happening? India market (specific regions or nationwide?).
When did the drop start? Sudden or gradual over weeks/months?
Who is affected? New users, repeat customers, or Prime subscribers?

A good way to start is by segmenting the DAU drop by user cohorts, device types, and geographic regions.

2. Initial Hypotheses — Potential Causes

Next, brainstorm potential causes. At this stage, don’t aim to prove or disprove anything — list down every possible factor:

1. Product/Experience Issues

Recent Bugs/Glitches: Did a recent update introduce bugs that are impacting the user experience?
App Performance Issues: Are users experiencing slow load times, crashes, or checkout errors?
User Interface (UI) Changes: Did any UI/UX redesign cause confusion or dissatisfaction?

2. Market and Competition

Competitor Promotions: Are Flipkart, Myntra, or other players running aggressive campaigns or sales?
Seasonal Trends: Is this part of a normal post-festive or off-season slump?
New Entrants: Has a new platform (JioMart, Tata Neu) gained traction and diverted users?

3. Economic and External Factors

Economic Slowdown: Is inflation or economic uncertainty impacting discretionary spending?
Regulatory Changes: Are there new government policies affecting e-commerce operations?
Logistics Disruptions: Are there delivery delays or inventory shortages?

4. User Behavior Shifts

Subscription Cancellations: Are Prime memberships declining?
Shift to Offline Shopping: Are users preferring in-store experiences post-pandemic?
Payment/Trust Issues: Has there been an increase in payment failures or fraud cases?

3. Data Collection — Building the Investigation

1. Quantitative Analysis (Backend Data):

DAU Segmentation: Break down DAU by region, age group, device, and platform (iOS, Android, Web).
Feature Usage: Check if specific features (cart, checkout, search) show abnormal drops.
Funnel Analysis: Examine where users drop off — search, product pages, or checkout.
Bounce Rate: Are more users abandoning the app or leaving after viewing a few pages?

2. Qualitative Analysis (User Feedback):

Customer Service Tickets: Review complaints to identify recurring pain points.
App Reviews/Surveys: Analyze app store reviews for sudden spikes in negative feedback.
Social Media Mentions: Monitor platforms like Twitter and LinkedIn for complaints or discussions.

3. External Data Sources:

Competitor Analysis: Track competitor pricing, offers, and user growth patterns.
Market Reports: Look at market data on e-commerce trends and user behavior.

4. Narrowing Down the Root Cause — Testing Hypotheses

Once you gather initial data, use it to eliminate less likely causes and focus on the strongest hypotheses.

Examples:

Case 1: If the DAU drop is more significant in Southern India, there may be regional disruptions (weather, delivery issues).
Case 2: If Android users are primarily affected, check for bugs in the latest app update.
Case 3: If competitor price analysis shows major undercutting by Flipkart, the cause may be external competition.

Conduct A/B testing or rollbacks to validate technical fixes. For market-driven factors, launch limited-time counter-promotions or flash sales to gauge responsiveness.

5. Crafting Solutions Based on Root Cause

Here’s how to address common root causes:

1. Product Bugs or Performance Issues:

Immediate Fix: Roll back to a previous stable version or patch the bug ASAP.
Long-Term: Enhance QA processes to catch critical issues before launch.

2. Competitive Promotions:

Immediate Fix: Launch targeted discount campaigns or price matching.
Long-Term: Focus on differentiators like loyalty programs, Prime-exclusive deals, and faster delivery options.

3. Economic/Market Slowdown:

Immediate Fix: Highlight budget-friendly products and introduce EMI or “buy now, pay later” options.
Long-Term: Diversify the product range to include lower-cost options.

4. Trust/Payment Issues:

Immediate Fix: Investigate and resolve payment gateway failures.
Long-Term: Partner with more payment providers to ensure seamless transactions.

6. Monitoring Recovery — Key Metrics to Track

DAU Growth Curve: Monitor how quickly DAUs rebound post-intervention.
Feature Engagement: Ensure features like search, cart, and checkout regain prior usage levels.
Customer Sentiment: Track NPS scores, app reviews, and social mentions to assess improvement in user perception.
Competitor Benchmarks: Continuously monitor competitors to stay ahead of market trends.

7. Proactive Measures — Preventing Future Drops

Real-Time Monitoring: Implement anomaly detection to catch DAU fluctuations early.
Feedback Loops: Establish channels for quicker user feedback on bugs and feature issues.
Regional Initiatives: Customize marketing strategies based on regional user behavior.
Operational Resilience: Strengthen supply chains and delivery networks to withstand disruptions.

Conclusion

Diagnosing a significant DAU drop isn’t about guesswork — it’s about methodical investigation, data-backed decisions, and swift execution. As a Product Manager, the ability to conduct structured root cause analysis not only stabilizes performance but also strengthens the foundation for future growth.

Amazon India’s drop in users can be a momentary glitch or a symptom of deeper market trends — either way, the PM’s role is to turn insights into action, ensuring that customers stay engaged, loyal, and active on the platform.

Thanks for reading! If you’ve got ideas to contribute to this conversation please comment. If you like what you read and want to see more, clap me some love! Follow me here, or connect with me on LinkedIn or Twitter.

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