India’s startup ecosystem has been increasingly getting global as well as domestic attention. With billions pouring every year into the ecosystem, it’s a great time to scale up. As part of scaling up, while several India startups have taken the international route, there are many startups looking to scale their expansion across India. Primarily, startups are looking to tap into the Tier 2 and Tier 3 cities by increasing their presence in these locations.
With a limited team and resources, one of the major limitations for startups is the expenditure on travel while in the expansion phase. While corporates have been tying up with online travel aggregators as well as agents to get corporate travel benefits, the benefits haven’t trickled down to the startups. To change this around, Mumbai-based Cleartrip has now announced Cleartrip for Work. With the new tier, the company is enabling travel benefits for employees of MSMEs or startups.
Talking to Inc42, Balu Ramchandran, Cleartrip senior vice president, explained that while the company has a separate corporate travel management vertical, Cleartrip for Work is for retail users who travel for work.
In simple terms, through ‘Cleartrip for Work’, travellers with a GST number can access unlimited corporate fares on flights with benefits that include unlimited cashbacks, complimentary in-flight meals, zero trip-modification charges, reduced cancellation fee, and reduced seat selection fee through a simple sign-in process.
The benefits are eligibile across flights and hotels for domestic and international travel.
What Does Cleartrip For Work Solve?
India’s startup ecosystem has grown from a small industry to a booming ecosystem and this growth is only about to get faster by the year. Expansion across India with an eye on international markets has been a key parameter for growth for Indian startups.
Ramachandran explained that while corporates with big budgets have had cheaper fares and value-added benefits, startups or MSMEs have had to stick with regular fares and expensive additional charges in case of cancellations or change in plans.
To address the need for travel for work, Cleartrip is looking to add value for such employees and businesses. He emphasised that sometimes the price for work travel and leisure travel would be similar or slightly different, but the company’s focus is to bring value to these travellers.
“India’s corporate travel market is the seventh largest in the world. It mostly talks about large corporates, but the larger base for India’s businesses is 40 Mn registered MSMEs. They don’t have access to travel benefits, as usually, corporate travel benefits require some kind of scale,” Ramachandran told Inc42.
What Does Cleartrip For Work Offer?
With Cleartrip for Work, business travellers such as entrepreneurs, consultants, or employees of SMEs and travel admins in startups can book and conveniently tap into corporate fares that are bundled with a host of premium perks.
In addition to the corporate fare benefits, Cleartrip is offering a 4% cashback on flights and 10% on hotel bookings. This cashback can be accumulated and used for booking personal leisure trips later. So essentially, Cleartrip for Work is a B2B/B2C offering, and not a pure B2B play.
Cleartrip for Work also enables access to in-built travel activity reports for consolidated reimbursements making the entire process smooth and transparent.
Cleartrip founder and CEO Stuart Crighton said Cleartrip for Work is a breakthrough product for corporate and SME customers. “Along with this [the benefits] customers will also have access to corporate fares with special inclusions, and GST invoices for input tax credits and reimbursement,” he added.
Travellers booking on the platform will need to complete a short registration process and input their GSTIN to access Cleartrip for Work fares. Once signed in, users can search their desired destination and find both retail fares as well as corporate fare options with benefits specified for each.
Unlike other enterprise plans, Cleartrip for Work is not a subscription plan. Ramachandran told us that there aren’t any management fees as it is a growth project for the company.
“In a 12-month timeframe, we have internal targets of getting up to $100Mn-$150 Mn GMV from this product.” – Balu Ramchandran, Cleartrip senior vice president
Cleartrip: Choosing Growth Over Profitability
Founded in 2006, Cleartrip is a veritable veteran in the Indian market when compared to other startups. The company is doing 50K transactions per day across regions, Ramchandran told us. For FY20, the company is targeting a GMV of $1.8 Bn. Further, Cleartrip is looking at 30% growth for the year overall. In India, specifically, the company is looking for a 15-20% growth.
In FY18, Cleartrip’s total revenues for the year were $43.36 Mn (INR 319.23 Cr), against $37.11 Mn (INR 273.21 Cr) in the previous year. At the same time, the company showed marginal maintenance in its losses as it posted a fall of 2% in its losses reaching $8.47 Mn (INR 62.35 Cr) in this fiscal, against $8.6 Mn (INR 63.35 Cr) for FY17.
The company’s results for FY19 haven’t been filed yet, but Ramachandran said that the company is looking to get over single-digit losses and is on track to be profitable in the next 2-3 years.But on a consolidated allocated level, the India business is profitable.
But beyond India, Cleartrip is looking to expand into growth markets such as Africa, where the company is looking for economic corridors to scale up. It is currently choosing to build and scale its business in these regions instead of chasing profits.
Competing against giants such as MakeMyTrip-GoIbibo, Yatra, etc, Cleartrip’s focus on leveraging startups to grow its B2B/B2C offering may become a major growth channel for the company that has seen it all in the Indian ecosystem.