Online travel portal Cleartrip, which aims to break even in the next fiscal year, plans to invest in expanding its footprint in the West Asia market.
“We already see profits coming in… if I take our mature businesses - air, the India business and Middle East business, they are now profitable,” Samyukth Sridharan, President and Chief Operating Officer at Cleartrip told The Hindu . “But our objective as a business is to take all of that and plough it back to where we need to invest. So, as an overall business we still see ourselves as investment-and-growth business.”
India’s online travel market is estimated to be about $30 billion.
According to a Tracxn report, about 56 travel start-ups had started operations in the country last year. MakeMyTrip and Ibibo merged in October last.
Cleartrip raised an undisclosed amount in funding from existing investors, U.S.-based Concur Technologies and Gund Investment, among others, in June amid a price war in the industry.
Investment in hotels
Cleartrip is currently looking at investing in hotels and accommodation as well as its almost year-old hyper-local activities segment ‘Locals,’ Mr. Sridharan said.
“Hotels and accommodation is a massive area of investment, not from discount but from product point of view. The current product which exists in the market, even with us, needs to under go a sea change,” Mr. Sridharan said. Unlike an airline purchase, hotels are much more complicated as it is difficult for users to get an understanding of the experience just by looking at a photo, he said.
Cleartrip is now testing a 360-degree view of hotels listed on the platform.
The service is live for some listings in Mumbai, and the online portal aims to get at least 50%-60% of all hotel listings to have a 360-degree view.
“We will also invest more in Local. I think it’s early days for the product but we are investing ahead for differentiation 3-4 years down the line. Roughly 15% of our total user base uses local from a search perspective. It is an integral part of our differentiation. A lot of people are doing air, accommodation but not many are into solving the discoverability problem. This will be a core area of investment,” Mr. Sridharan said.
Losses double
Cleartrip’s losses more than doubled to ₹64.6 crore in the year ended March 2016 from ₹29 crore in the previous year. However, revenues grew by 32% to ₹254 crore in FY16.
“There are parts of our business which are mature and profitable and parts where we are still investing. When do we break even? Next year, FY18,” Mr. Sridharan said.
The company has a leadership position as far as Dubai is concerned but is now looking at strengthening presence in other GCC markets, he said.
“We operate in India and Dubai. In Dubai, we are clear market leaders. But there are markets near that which have potential and we want to invest in as we look at expanding footprint globally.”
To target these markets, which include Bahrain, Qatar and Saudi Arabia, Cleartrip will also introduce an Arabic version of the platform which will go live in a few weeks.
“Presence in Dubai also helps the Indian market. A large part of traffic into Dubai comes from India and visa versa. The reason we went to Dubai was that in early days we saw 10% of our searches coming from Dubai,” he said.
India, Philippines
Indians and Filipinos are the two largest nationalities booking on Cleartrip in the Middle East market contributing to 50% of the company’s transactions.
“For the stuff that we want to do for next couple of years, do we have capital? Yes, we do. Today, are we sufficiently funded for a couple of years? Yes.
“But if we look at business over the next 10 years we would need capital. It will mean a conversation with our current shareholders,” Mr. Sridharan said.
Mobile phones have changed consumer behaviour drastically and while the focus on application is far higher than it used to be a few years ago, it is important that both application and desktop environment scale up simultaneously, he said.
“We would like to believe that everybody in India will be on an app but it may not happen that way. There are multiple devices already. We have seen use of mobile web, app, desktop at the same time and we need to make sure that the user experience across these devices remains the same. One cannot lag behind the other.” The Cleartrip app has about 15 million downloads with about 30% of these being active monthly.
For Cleartrip, traffic currently is skewed toward mobile with 70% traffic arising out of the device.
The company will also be focus on ramping up its technology team to roll out products and features faster. “Technology is important as it will help us scale with the right economics. We are out hiring and increasing and our manpower by 40% to help us do things faster. Getting the pace at which we can roll out is very important…We are not a large organisation. We have about 600 people, of which 150 people are in our tech team which we will scale up significantly.”
