Indian Giant MakeMyTrip Makes Its Next Moves
One out of every 12 domestic air tickets are booked through MakeMyTrip the Indian travel agency. The company claims it is the largest online seller of tickets in India.
Here’s a round-up of what’s new with the company, which has grown its revenue 66% in the past year to $197 million and is headquartered in Gurgaon.
The company has told the press in a series of interviews that it has $88 million in cash for acquisitions, which it plans to deploy in a series of small buys.
It is looking for companies that are bundling hotels and holidays, to help it shift away from being dependent on 75% of its revenue from low-margin air ticket sales.
Its rival Yatra has made four acquisitions in the past 18 months, and Expedia India says it plans to make buys, too.
This week, it added PayPal as a payment option for non-residents.
This year it launched an Android app that has been downloaded 60,000 times in the first two months.
It also recently began selling “opaque fares” in a model similar to Hotwire‘s, where the name of the airline is not disclosed to the traveler until a purchase is completed.
MakeMyTrip has now signed verbal and written agreements against poaching employees with 30 other organizations.
Competition for talent is important. The company recently lost two engineers and product developers managers, Harkirat Singh and Deepak Wadhwa, who launched their own venture focusing on the package market weareholidays.com, last month.
Package sales are big in India, where group family travel is popular.
This month, the company, which has 950 employees, was ranked among the top five “great places to work in India” by the Indian affiliate of the US- based Great Places to Work Institute.
Fending off foreign rivals
MakeMyTrip and rival OTA Yatra continue to cement their home-grown advantage against foreign owned rivals like Expedia by having a culturally relevant approach: Both companies started as online operations but soon opened bricks-and-mortars stores to increase brand awareness among locals.
MakeMyTrip sells a third of its inventory through its 20 outlets, some of which are franchised. Outlets take about four years to become profitable on average, says the company.
In comparison: Rival Yatra has 40 outlets. Traditional travel agencies like Cox and Kings (120 outlets) and Thomas Cook India (223) are looking to expand this year, too.
Meanwhile, to compete without a bricks-and-mortar presence, Expedia is spending $9 million in advertisement TV across local platforms, as part of its $13 million in-country marketing spend in 2012.