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Traveller No. 1: Wants to spend a week in Goa. Drives to the travel agent’s office. Stands in queue. Haggles with the tour operator. Finally returns home to his waiting family with the tickets, but not entirely satisfied. Time spent: 4 hours. Agony of driving, parking, queuing up, waiting: too much.
Traveller No. 2: Wants holiday in similar locale. Switches on his laptop. Goes to any of the travel websites. Compares the rates and clicks buy when he sees the best deal. Time spent: 1 hour minus all the aggravation.
| The second type of traveller can thank the likes of Deep Kalra, who gave up his job in GE Capital to launch his travel portal Makemytrip.com in 2000. Ask him why he launched his company online and he is refreshingly candid, “The dotcom business and the Internet offered one of the most interesting opportunities. It was one of the easiest times to be an entrepreneur.” The idea was to set up comprehensive online travel site with real time booking for flights, hotels, holidays and cars and to make affordable travel options available online. |
EASY RIDER: Kalra (centre) realised early that marketing travel packages or airlines isn’t entirely about selling cheap, it’s about making life easier for the customer
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Kalra isn’t modest about his company. “Makemytrip.com-which has 750,000 unique visitors a month-is heralding a revolution in the way travel will be bought in India. Our travel portal has shifted the power of information and decision-making from the travel agent to the customer.” The site was launched both for the Indian as well as the NRI markets. But the market in India was not ready for it. In hindsight, says Kalra, one of the wisest things he did was not to burn too much money marketing the site in the Indian market.
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People were ready to pay a premium for the delivery of tickets. So it’s not just only about price, it’s about convenience |
Kalra then rebooted his business. Within 2-3 months of the launch, he shut down all spending in India and focused solely on the NRI market which was responding well. These were primarily people living in the US, who were comfortable on the Internet. They were already buying things on the Internet and they started using www.makemytrip.com for coming home.
Kalra launched the India business in September 2005. What gave a boost to the business was the arrival of many airlines which provided variability in price. Another major factor was the success of irctc.co.in (the online ticketing website of Indian Railways). Data showed people from small cities were also buying tickets from the website. “I realised there was a bigger need for a web model like ours in a smaller city than a big city. Further, around 60 per cent of the tickets sold on irctc.co.in was for non-AC trains. This meant the common man was buying online through credit cards.”
However, what struck Kalra was that people were ready to pay a premium for the delivery of the ticket. So it’s not just only about price, it’s about convenience. And that has been his model.
For now, Kalra is focussed on the inbound market, especially NRIs, in a big way. That explains his offices in New York. The site is focusing on NRIs in the US, Australia, and the UK, which add up to about roughly 6.2 million people. Kalra expects 75 per cent of his revenues from the inbound market. The total size of the online travel industry in India is around Rs 1,500 crore. With a turnover of Rs 200 crore, Makemytrip claims a 13-14 per cent share.
So how does he ensure the lowest fare guarantee? Makemytrip has tied up real-time with all airline systems. As a result it gets real time access to the same rates as on the airline site, which has to be the cheapest rate.
Kalra, however, is quick to add that selling cheapest isn’t the jing-bang of marketing. “If you compete only on the basis of cost, there is no end to under-cutting. However, this is not the only differentiating factor. The other is convenience. Providing good customer service is one of the ways of staying ahead of the competition. Apart from this you need to change the content on your site regularly so that every time a customer logs on, he finds something new that keeps him engaged. Kalra, certainly, is not on his own
trip.
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