Very few Indian online companies have reached IPO, MakeMyTrip (MMT) is one among them. NASDAQ-listed Indian online travel services firm MakeMyTrip Ltd, is India’s leading online travel company and was founded in the year 2000 by Deep Kalra. Created to empower the Indian traveler with instant booking and comprehensive choices, the company began its journey in the US-India travel market.
Launched in India in 2005, the company’s services include air tickets, customised holiday packages, hotel bookings, railway tickets etc. It had previously raised funding from SAIF Partners, Tiger Global, Helion Venture Partners and Sierra Ventures. Last year, MMT had reported a 27.7% rise in revenues less service costs to $28.5 Mn for the third quarter ended December 31, 2013 in comparison to year before.
We caught up with Deep Kalra, Founder & Chief Executive Officer of MakeMyTrip to understand the state of Indian OTAs, the competition and way forward of MakeMyTrip.
Inc42: MMT is clearly a leader among OTAs in India, how you maintain this competitive edge?
Deep: As a company, we are closely monitoring what our customers want in order to cater to new and emerging needs. Today, MakeMyTrip is much more than just a travel portal – it is a one-stop-travel-shop that offers the broadest selection of travel products and services in India. One of our key priorities is to build products that simplify travel for our customers. We do this by focusing on innovation and customer-delight, enabled by Technology. In this endeavor, we are focused on reaching out to customer on their platform-of-choice. Our comprehensive offerings and convenient payment options are available across web and mobile screens. If there is a customer looking for travel-related products, ou r various touch-points will ensure that we reach out to them sooner than our competitors.
At heart, our business is about using Technology to enable and enhance travel search and purchase experiences. Over the last couple of years, we have strengthened focus on the mobile channel as a growth driver. Our first mobile app was launched in 2011 and in June 2012, we became the first Indian OTA to offer a travel-booking app for iPhone users. These apps allow customers to book flights, hotels and bus on the move, cancel their bookings, track the status of their refunds, send e-tickets and vouchers, check flight status and also look for alternate arrangements in case of last minute delays. It also allows them to easily find hotels that are near their current location, and provide attractive last minute deals for same day hotel bookings.
Inc42: What are your plans for global expansion? How promising is the Southeast Asian market for MMT right now?
Deep: The outbound opportunity from India is significant, especially in the Hotels and Packages segment. Our aim is to be the preferred OTA for all travelers looking to explore India and the South-East Asia. We are also building our presence in other emerging markets such as the UAE and South-East Asia through organic and inorganic expansion. We have strong partnerships with suppliers in India and the South-East Asia region through our acquisitions of DMCs in Singapore and Thailand. With the recent acquisition of Easytobook.com, we are expanding our presence beyond South-East Asia and looking forward to welcome inbound customers to our hotel partners in Asia.
Inc42: How things have changed post IPO?
Deep: It helped us continued with our focus on key areas of investment along with raising additional funds from the market. We are also using the money for technology upgrades as well as working capital. But the bulk of what we have raised is clearly to be used for mergers and acquisitions (M&A) because we are cash-flow positive.
Inc42: Recently, a lot of trip planning websites has sprouted with some of them doing well too, how MMT is positioning itself differently in this segment?
Deep: The outlook for the online travel industry in India is robust. With newer technologies and platforms being introduced rapidly, more players are flooding the market. The competition is going to be strong but it will only push us to innovate and better ourselves. Trip-planning websites help the customer in the research phase but a lot of the need (and problem-solving) is still around actually executing the trip seamlessly. There is a lot of destination-information with us and we do leverage and showcase this to our social communities. Customers come to us for an end-to-end solution. We have experimented with value-adding to customers’ interactions with us by launching apps such as MyTripIdeas, TripAlong and RoutePlanner, an app that makes travel planning faster and easier. RoutePlanner integrates availability of services like flights, buses, trains and cabs to display all possible connectivity options between destinations in India. Thus it enables trip planning between any two destinations in India by combining multiple modes of transportation across 4,300 cities, 2,300 flight routes, 65,000 bus routes, 970,000 train routes and an extensive road network. While we do not want to dilute our brand-proposition, we will continue to find ways to value-add to the traveller’s experience.
Inc42: What’s the share of MMT in the Indian OTA industry?
Deep: In June 2013, PhocusWright released a report pegging MakeMyTrip market-share to be 47% of Indian OTA Market
Inc42: Can you please tell the revenue share from different sources in MMT?
Deep:
- Revenue rose 22.7% YoY to $70.0 million in 3Q14.
- Revenue less service costs increased 42.1% YoY to $28.5 million in 3Q14.
- Revenue less service costs for Hotels and packages increased 50.6% YoY and Air Ticketing increased 38.3% YoY for 3Q14.
Inc42: How do you see OTA market shaping up?
Deep: Over the years we have witnessed a consolidation and emergence of global players in the India market, which has in turn fuelled the growth of Indian OTA segment. Also, the growth of the Indian travel market has led Indian OTAs to differentiate and focus on non-air business streams to drive revenue and profitability.
2013 has seen some landmark moments for the Indian Travel industry. The take-off of mobile internet and applications has revolutionized the OTA segment. Access channels have evolved with the growing dependency on smartphones, and today more and more people are booking via mobile. We received 20 per cent of site traffic from the mobile channel.
Big Data has emerged as an important enabler for travel companies to engage better with customers and deliver service efficiently and intelligently. It provides us a great opportunity to positively impact both the business-end and the experience at the customer-end through better decision-making, greater product and service innovation and stronger customer relationships that will be delivered by new approaches to customer management, revenue management and internal operations.
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