MakeMyTrip Takes Steps to Escape Becoming a Price-War Casualty
Skift Take
The online travel market in India is ripe with opportunity. But competition is brutal. In response, MakeMyTrip has recently debuted loyalty programs and technological upgrades to entice well-heeled customers to choose it over the discounters.
Everyone knows that India presents a large growth opportunity for travel businesses as its middle class widens and shifts to booking trips online.
But not everyone knows how to be profitable while building a business in India. The opportunity has sparked fierce competition, requiring local players to use discounts to build up their customer bases. That dynamic appears to have dampened profits for all players, domestic and foreign.
A case in point is India's largest online travel agency, MakeMyTrip, with a market capitalization of $2.4 billion.
On Wednesday, MakeMyTrip reported a loss of $62 million for the quarter ended September 30, 2017. That was a 57 percent increase over the loss it had in the same period a year prior.
The news bothered investors. They shaved 9 percent off the company's market value in trading by the market's close.
The company noted the loss was about the same as the $68.2 million loss it reported in the prior quarter, and was mostly tied to merger-related expenses for its acquisition of rival Ibibo earlier this year.
Yet growth at the Gurgaon, India-based company has been continuing. Its revenue rose to $152.9 million in the September quarter, up 79 percent over the same period a year earlier.
Many Rivals
MakeMyTrip, which offers flights, hotels, buses, and trains, faces competition on several fronts. For four-and-five star hotels, it saw more inventory g
