PM Interview Question →Canva is experiencing a gradual decline in it’s paid subscribers restricted to India? What is going wrong?

Published in

Bootcamp

5 min readJan 24, 2025

Imagine you’re the Product Manager at Canva, and the data shows a gradual decline in paid subscribers in India — a critical and growing market. While the decline isn’t sudden, it signals underlying issues that, if left unaddressed, could snowball into a larger churn problem.

As a PM, the goal is to diagnose the cause methodically, isolate the factors contributing to this trend, and craft data-driven solutions. In this article, I’ll outline a structured approach to tackle the problem, from initial hypothesis generation to actionable strategies that restore growth.

1. Understanding the Problem — Defining the Scope

The first step is to clearly define the problem and narrow down its scope:

What’s the decline rate? Is it 5% or 20% over six months?
Which segment is affected? Are individual creators, small businesses, or enterprise accounts churning?
How widespread is it? Is the drop localized to specific regions within India or across the country?
When did it start? Was the decline gradual post-launch of a new feature or pricing change?

This initial diagnosis ensures we avoid generalized solutions and focus on the right user segments and issues.

2. Hypothesis Generation — What Could Be Going Wrong?

1. Pricing Sensitivity (Cost Perception):

Has Canva’s pricing become uncompetitive for the Indian market?
Are local competitors offering similar features at lower prices?

2. Value Perception (Feature-Value Mismatch):

Are users unable to justify the value of Canva Pro over the free tier?
Is there feature overlap with free competitors?

3. Payment Barriers (Operational Issues):

Are there increased payment failures or issues with payment gateways for Indian users?
Is the renewal process too cumbersome?

4. Economic and Market Trends:

Are small businesses and freelancers cutting discretionary costs due to economic downturns?
Is there a shift in budget allocation toward other tools?

5. Product Saturation/Feature Fatigue:

Are users experiencing diminishing returns on Canva Pro features?
Is the Pro offering not evolving fast enough to keep users engaged?

6. Competitor Pressure:

Has the rise of platforms like Adobe Express, Figma, or Desygner created more attractive alternatives?
Are AI design tools offering faster, cheaper design capabilities?

3. Data Collection — How to Validate Hypotheses

1. Quantitative Data Analysis:

Churn Analysis: Segment churned users by demographics, usage patterns, and tenure.
Feature Usage: Identify underutilized Canva Pro features that may signal low perceived value.
Engagement Metrics: Monitor drop-offs in feature engagement before subscription cancellations.
Payment Data: Analyze failed renewal rates and abandoned upgrade journeys.

2. Qualitative Research:

Exit Surveys: Gather feedback from users who cancel Pro subscriptions — why are they leaving?
Customer Interviews: Speak to small businesses and creators to understand budget shifts and feature needs.
Competitor Benchmarking: Analyze competitor pricing, new features, and promotional offers in India.

3. External Data Sources:

Economic Reports: Look at market reports on SME spending, creator economy trends, and e-commerce patterns.
Social Media Feedback: Scan platforms like Twitter, LinkedIn, and Reddit for user discussions about Canva.

4. Root Cause Identification — Key Indicators to Watch

1. Pricing Sensitivity:

If churn is higher among price-sensitive cohorts (freelancers, students), pricing adjustments or localized plans might be necessary.

2. Feature Overlap:

If churn coincides with competitor feature rollouts, users may be switching due to perceived redundancy.

3. Payment Failures:

High drop-offs during renewal suggest payment barriers rather than dissatisfaction with the product.

4. Economic Trends:

A broader decline in paid software subscriptions across industries could indicate macroeconomic factors at play.

5. Crafting Solutions Based on Root Cause

1. Addressing Pricing Sensitivity:

Localized Pricing: Offer lower-tier plans customized for Indian SMBs, startups, and freelancers.
Seasonal Discounts: Run promotions or discounts during festival seasons or fiscal year-ends.
Freemium Expansion: Expand the feature set of Canva’s free tier while keeping advanced features exclusive to Pro.

2. Increasing Perceived Value:

Feature Expansion: Introduce localized design templates, regional fonts, and India-specific tools (wedding invites, social media kits).
Bundled Offerings: Partner with complementary platforms (e.g., social media scheduling tools) to provide bundled value.
Creator Economy Focus: Offer exclusive tools for content creators and influencers to enhance video content, YouTube banners, etc.

3. Solving Payment Barriers:

Diverse Payment Options: Expand to UPI, digital wallets (Paytm, PhonePe), and EMI options.
Auto-Retry Mechanism: Implement smart retries for failed payments.
Localized Payment Gateways: Partner with Indian payment providers to reduce failures.

4. Fending Off Competition:

Competitive Feature Development: Invest in AI design automation to keep pace with AI-driven competitors.
Differentiation Through Collaboration: Focus on Canva’s collaboration features, positioning it as a tool for teams rather than just individuals.

6. Reactivating Churned Users

Win-Back Campaigns: Target churned users with email campaigns showcasing new features or offering time-limited discounts.
Surveys and Feedback Loops: Ask churned users what features could bring them back and implement their feedback.
Freemium Engagement: Allow churned users to continue using basic features and periodically nudge them toward re-subscribing.

7. Monitoring Recovery — Success Metrics to Track

1. Subscriber Growth:

Month-over-month growth in paid subscribers in India.

2. Renewal Rates:

Percentage of Pro subscribers who renew successfully.

3. Churn Rate:

Reduction in overall churn rate by user cohort (freelancers, SMBs).

4. Feature Engagement:

Increased usage of high-value Pro features by the Indian user base.

5. Win-Back Rate:

Percentage of churned users reactivating Canva Pro subscriptions.

Conclusion

A decline in Canva’s paid subscribers in India isn’t a one-size-fits-all problem — it requires a nuanced, segmented approach to understand user behavior, competitive dynamics, and market trends. By methodically investigating the root cause and implementing targeted solutions, a Product Manager can not only reverse the trend but also strengthen Canva’s positioning in one of the fastest-growing digital economies.

The key takeaway? Listening to users, adapting to market realities, and staying ahead of the competition through continuous innovation.

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.

Let’a have a 1:1 call → https://topmate.io/rohit_verma_pm