Amazon is doing travel these days in India in its own image — as a way to build even greater traction for Amazon Pay. Hey Amazon, where to next?
Dennis' Online Travel Briefing
Editor’s Note: Every Wednesday, Executive Editor and online travel rockstar Dennis Schaal will bring readers exclusive reporting and insight into the business of online travel and digital booking, and how this sector has an impact across the travel industry.
Online Travel This Week
India’s MakeMyTrip is looking to its exclusive flights partnership with Amazon in India to help the online travel agency expand into the country’s smaller cities.
The flights section of Amazon.in, which is powered by new partner MakeMyTrip, went live in the online travel agency’s fiscal fourth quarter, which ended March 31. In April, MakeMyTrip also implemented a partnership with PhonePe, a digital payments and fintech company, which could help expand buy now and pay later offerings.
With the Amazon deal, users tap into their Amazon Pay accounts to book India domestic flights from airlines such as SpiceJet and Go First. They get “instant discounts” on the flight bookings, which MakeMyTrip said replicates its user experience because the partnership comes with a deep integration between Amazon and MakeMyTrip.
“So from a consumer point of view, when they go on Amazon Pay, they basically are getting the benefit of the MakeMyTrip brand, pretty much the same UI (User Interface), same product experience because that’s what is controlled from a pricing standpoint,” MakeMyTrip co-founder and Group CEO Rajesh Magow said Wednesday during the company’s fourth quarter and fiscal-year 2022 earnings call. “It’s effectively from a consumer point of view, the transaction is happening on MakeMyTrip.”
He said that one of the early trends from both partnerships is MakeMyTrip is experiencing new users “coming in more and more from Tier 3 and Tier 4 cities, which is very encouraging, which is exactly what was our objective as well.”
Both partnerships have an angle related to MakeMyTrip’s India rival Cleartrip, which e-commerce retailer Flipkart acquired in 2021. Up until that point, an independent Cleartrip had been the Amazon Pay partner for India domestic flights. However, Amazon didn’t see it in its own interests to keep the partnership going with Cleartrip when it became owned by an online retail rival, Flipkart.
But those kinds of familial relations didn’t stop MakeMyTrip from entering into a fintech partnership with PhonePe, which Flipkart likewise owns. Magow said PhonePe’s ties to Flipkart wasn’t a big concern because Flipkart and PhonePe run their businesses independently, and their business models are different.
In terms of financial results, MakeMyTrip was in the red both for the fourth quarter (a $4.1 million loss versus a profit of $3.2 million in the fourth quarter of 2021), and full-fiscal-year 2022 (a $45.6 million loss compared with a wider loss of $56 million in 2021).
During the quarter that ended March 31, MakeMyTrip saw leisure demand coming back, although inflation boosted airfares, and that was a headwind in terms of consumer sentiment. India opened its skies to commercial aviation internationally March 27.
The Amazon and PhonePe partnerships could help MakeMyTrip compete against the likes of big-name competitors.
“Booking.com and Expedia or any of the international OTAs (online travel agencies)” have been active in the domestic market, according to Magow. Any lift the partnerships bring MakeMyTrip in Tier 3 and Tier 4 cities would be beneficial because that is a key part of MakeMyTrip’s growth strategy, along with improving the customer experience and onboarding new supply.
The Amazon partnership won’t be a panacea for MakeMyTrip, but it could help in finding new customers.
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