Amazon's deal with Cleartrip using Amazon Pay for India domestic flights could be a forerunner of similar moves in other emerging markets where payment systems are being disrupted. This time around in travel, Amazon has decided to partner rather than build its own offering — a very reasonable way to get back into the game.
India online travel agency Cleartrip’s deal to power domestic flights on Amazon Pay India was several quarters in the making, and it involves Cleartrip paying Amazon promotional fees to leverage Amazon’s traffic in a manner similar to other customer-acquisition arrangements.
Balu Ramachandran, senior vice president of Cleartrip, told Skift Tuesday that discussions with Amazon India and Amazon Pay over several quarters revolved around “us trying to evangelize” the changes to payment systems taking place in India with several players bringing new solutions into the market.
The Cleartrip official, who runs the company’s India business, said he’s sure Amazon did its due diligence and evaluated other potential travel partners, but chose Cleartrip because of its tech acumen and distribution relationships, among other factors. He wouldn’t comment on whether the agreement with Amazon was exclusive, but noted that the air bookings take place on Cleartrip.
Ramachandran wouldn’t comment on the amount or nature of the fees Cleartrip pays Amazon for the deal.
Under the new initiative, travelers pay Cleartrip for the airfare plus a convenience fee, which is standard among online travel agencies and airlines in India, and they get cash back for the purchase, with a higher rebate going to Amazon Prime members than nonmembers. He wouldn’t comment on which company pays that rebate to consumers.
Amazon flights for the India domestic market have been live for a small group of users for about a month before Skift broke the story last week about its official launch to Amazon’s entire audience in India.
Ramachandran said it was too early to discern any patterns about the bookings so far, but he expects reasonable volumes from the deal because of Amazon’s stature and since the India airline market is experience a growth spurt.
What Does It Mean for Amazon?
Ramachandran characterized Amazon’s launch of domestic flights in India as Amazon’s “foray” into travel, adding that the feature is focused on domestic airline tickets “for the moment.” He added that Amazon’s travel offerings “could evolve.”
What’s interesting is that Amazon chose to go the partnership route rather than try to get into flights or hotels on its own, as it did several years ago when it debuted hotel bookings for weekend getaways from several U.S. cities, and abandoned the effort a year later.
It wouldn’t be surprising to see Amazon replicate what it is doing in India in other emerging markets with key partnerships rather than going head to head with entrenched online travel players with its own offering in mature markets.
But this is travel and anything can happen.
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Photo Credit: Balu Ramchandran, senior vice president of India's Cleartrip, said his team was speaking to Amazon India and Amazon Pay for 'several quarters' prior to the launch of their flights partnership.d Cleartrip