Undeterred by competition from global online travel companies, MakeMyTrip envisions to be the first port of call for Indian travelers. A travel superapp is definitely a step in the right direction towards this goal.
MakeMyTrip has an ambitious vision — to be the first port of call for the Indian traveler, whether they are traveling within the country or internationally. Tell co-founder and group CEO Rajesh Magow that it’s a tall order and he quips, “It is effectively a reiteration of the vision that was there, from the very beginning.”
MakeMyTrip has also ventured into the Middle East as a completely new geography and it plans to eventually launch a superapp too.
Over the years, the online travel company has been increasing its product offerings through its brands — MakeMyTrip, Goibibo and redBus. Today, MakeMyTrip offers transportation options that include, flight, trains, buses as well as inter-city cabs and offers a wide range of accommodation options across all segments — be it budget, premium, mid-segment, independent properties or chain hotels as well as alternative accommodations — hostels, apartments, villas and homestays.
And then in the last three to five years, the company has been focussing on building ancillary products, including airlines ancillaries like meals, seats and travel insurance. With its fintech arm — TripMoney, the online company offers forex as well as insurance and then there is the book now, pay later offering.
“We have been expanding to not only complete the product offerings, which could be there in the traveler’s mind, but also making sure that we have the depth of all inventory and content, as well as the ancillary and enabling products,” Magow said.
The online company has also been making investments in increasing the number of distribution channels. In the last three to four years MakeMyTrip has been tapping into new demand segments — there is a business travel product for corporates, Mybiz for small and medium enterprises, Quest2Travel for enterprises. The company has also recently built MyPartner a B2B travel agents’ platform.
“We have 25,000 active travel agents now in MyPartner, more than 1,600 large and medium size corporate accounts and 30,000 small and medium corporate accounts,” Magow said.
In a conversation with Skift, Magow talked about partnerships, fintech offerings and ambitions of a travel superapp.
The comments have been edited for length and clarity.
Skift: Based on the range of products and offerings provided by MakeMyTrip, it seems that you are on your way to build a travel superapp.
Magow: We definitely want to be a superapp in the travel vertical. We do not aspire to become a horizontal, superapp, like Paytm or any of the other apps, but yes, in the travel vertical that’s a stated vision in terms of product offerings. That vision is what we have been expanding over the years and therefore bringing in even adjacent ancillary products like TripMoney, which as a horizontal manages all kinds of payment options powered through API structures on all our brands.
So, from a consumer point of view, to the captive audience and the growing audience that we have on our platforms, we continue to give them options, not only for every travel or accommodation specific use case, but also help them take those decisions. We also give them the option to choose ancillary products because that will be the need and there are a few offerings lined up in quarters to come. Through our book now pay later or holidays on installment products, we can help the customer to upgrade from a domestic holiday to an overseas trip, or upgrade to a five-star or a four-star property during their holiday.
Skift: With travel being more of a discretionary spend, how have inflationary headwinds affected your business?
Rajesh Magow: Our business from a demand and consumer sentiment standpoint was recovering nicely, the headwinds came in because of inflation, led by fuel price hike. The good news now is that the fuel price is coming down and that has an immediate impact. The implication of all this fuel-led inflation is that fares go up and then demand takes a beating. Had the inflationary headwinds not been there, we would have crossed the pre pandemic numbers for domestic. The demand momentum is huge, but there are short-term macro headwinds. But if you hear cut the noise out, you will find that India’s commentary, compared to the rest of the world, is better. We are not talking about going into recession. Our growth rate might slow down, but it will still be at 5.5-6 percent.
We do want fares to stabilize and then the momentum will pick up because there’s demand for sure. Also, while the discretionary part of travel is leisure, the non-discretionary part — business travel — is picking up significantly. In a country like India not all travel is air travel. If the flight ticket is expensive, you change your mode of transport and take a train or bus to travel, or perhaps pick up your own car if it is a nearby destination. The numbers are moving up for business travel. Even large enterprises are travelling now, business travel recovery was slow because of Covid advisories. Global multinational companies were the last ones to allow people to travel. The business revenue is picking up. We have a strong consumer sentiment, it’s just a matter of inflation coming down.
Skift: Fintech is the buzzword in travel, do you plan to diversify your fintech offerings?
Magow: Fintech is very important from a consumer standpoint because it can open up the market. India as a market, from a consumer lending standpoint, was confined to a traditional and conventional way of banking. The headroom that is there in the Indian market, just in the consumer lending space is phenomenal, including the regulations that might come. Travel could be a good product because it is a high-ticket price product, whether it is domestic — a family of four travelling or an overseas trip, therefore, lending could help. Through various verticals we’d be offering insurance, consumer lending and forex.
Right now, we will have TripMoney catered to all the captive audience that we have, spread across our three brands — MakeMyTrip, Goibibo and Redbus. As we get tons of traffic from these brands we want to sell these products there. But the way we are structured — technologically and entity wise — we could potentially diversify and have an independent set of customers coming to TripMoney. But that’s a long-term vision.
Skift: MakeMyTrip lately partnered with Amazon for flights, do you plan to increase the offerings with Amazon beyond flights and do you also plan to partner with other players?
Magow: Some of these big players because of their horizontal nature of business and the diverse categories of products — from essentials to discretionary products — have more traffic. Our partnership construct with them from a growth standpoint, is new user acquisition. The construct is that it will be powered by us with our brand presence. From a consumer point of view, the partner should be comfortable saying that it is a travel expert who they are partnering with. Today, we are partnering with Amazon Pay on flights and very soon we will be on hotels as well, it’s a work in progress.
We are already there for buses as well. Our Redbus brand powers Amazon Pay for buses, similarly for PhonePe we will be partnering for flights and hotels. We are comfortable partnering with entities as long as, from a customer standpoint, we control the experience and the price, not for any other reason, but because we are the experts in that. With some other core business, they want to provide their customer base one more reason to come on their platform, as long as the fulfillment and the experience happens from my side, we are fine with that. This would definitely be a part of our strategy, we already have a few partnerships and if anyone is potentially interested, we’d be happy to partner with them.
Skift: You have also partnered with PhonePe, which has the same parent company as Cleartrip, who you compete with in India. Are you ready to partner with companies who already work with certain competitors?
Magow: The answer to that would be no. If somebody is competing, then it doesn’t make any sense for us to partner with them. Flipkart is definitely competing through ClearTrip now, so, there is no question of any partnership. PhonePe and Flipkart even though they belong to the larger umbrella under Walmart, work completely independently. The fact that they don’t have Cleartrip by PhonePe or ClearTrip is not powering their flights validates the fact that they want to operate independently. As long as that stays, we have no problem.
Skift: With Booking.com and Expedia increasing their focus in the India market, does that also make it necessary for MakeMyTrip to opt for customer acquisition by looking into the smaller cities and interiors of India?
Magow: From a competitive landscape, Booking, Expedia or Airbnb are global players and credible too. Their strength is more about bringing travelers into India and we don’t compete into inbound India. While it takes a lot to be able to crack any emerging market, these companies have been around for 10-12 years. We are happy to compete with them on the back of the strength that we understand Indian consumers and the market probably better than anybody else.
We do watch them and compete with them in the marketplace and that’s healthy competition. The good news is that none of these global brands try to disrupt the market on pricing. They operate on the back of experience and that competition is very healthy and if they learn a thing or two from us, we might end up learning 10 things from them. If you look at actual hard numbers, I’m not sure there has been any significant gains for them from a market share standpoint. Also, in a post-pandemic market the revived focus is also natural to increase the share a little bit more.
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Photo credit: Over the years, MakeMyTrip has been increasing its product offerings. MakeMyTrip