Catching up with Deep Kalra at FICCI’S Digital Travel, Hospitality and Innovation Summit 2017. The event is driven by the FICCI Travel Technology Committee of which Deep Kalra is a member. Competing OTA, Yatra’s cofounder and CEO, Dhruv Shringri is chairman of this committee.
1. Explain the deal with ibibo to us (it’s so complicated)
It was actually a merger with ibibo Group. MakeMyTrip India bought 100 percent of goibibo and redBus (both part of ibibo Group). Then Naspers, the South African tech company which owns a majority of ibibo Group got a 40 percent stake of MakeMyTrip.
This makes sense because MakeMyTrip had saturated its options of spending on discounts. We had to get back to making a profit. Naspers and goibibo on the other hand still were very clear they will continue to give discounts. They had enough margin to continue heavy discounting which is still necessary in the online travel market. Naspers owns 25 percent of Tencent (A Chinese internet media company that beat 2016 forecasts to make 1.5 billion dollars in profit).
We checked all this before going into the deal. Out of the deal we got a great agile team and capital resources and Naspers gets to be the single largest shareholder of India’s number one online travel agent.
The structure of the deal is complicated. We know most mergers don’t work out, we are cognizant of the fact and trying to move forward together avoiding most of the speed bumps. We are still in the honeymoon phase, it’s a lot of fun, but it’s also a lot of work. So only time will tell.
2. Ever thought of partnering with Airbnb?Competing or partnering? Wait are you from Airbnb? [Nope, we are BWDisrupt]
No we won’t become partners. MakeMyTrip has a direct competitor to Airbnb called RightStay. We absolutely will compete head on with Airbnb.
3. Any more mergers or acquisitions in the pipeline?Yes we will look at more, and will go ahead with it if it makes sense. It could even be a foreign company if it makes sense for us.
Can’t really delve deeper into the case, we are after all a public company [and smiles apologetically].
4. Tell us something we don’t know about Indians booking air tickets onlineDid you know that close to 65 percent of air tickets in India are bought through mobile? And MakeMyTrip claims 22 to 23 percent of this share.
India is also the fastest growing travel market in the world. But complex holiday booking will still take time to sell online since Indians are jittery - especially the first time travellers and needs lots of reassurance, which may not be possible online.
Only 10 percent of users browsing OTA websites actually buy anything. The other 90 percent of he time is more like an OTA website performing a social service to the curious online surfer.
5. One thing MakeMyTrip failed atWe tried selling to MICE (meetings, incentives, conferences and exhibitions/events) customers. But it didn’t work so we left it. But I still think the corporate travel segment is a promising market just that we have to find that one riveting selling point to convince the corporate traveller to buy from an OTA.
6. Advice to young entrepreneurs trying to startupThink very long and hard about what customer problems you are trying to solve. It most likely won’t be a single moment over a cup of tea. Then be realistic about whether you can actually solve that problem.
7. Donald Trump doesn’t like globalization. Your thoughts on globalization.Stalling globalization will absolutely hurt the travel industry. Trump as a political figure will need to say certain things when he gets on a public platform to appease Americans.
But regulations like no smart devices on flights will kill the flight market.
[This is about Donald Trump’s administration banning several non-American airline passengers from carrying on smart devices bigger than smartphones on flights originating from several Muslim countries. Britain is supposed to soon follow suit.]
Speaking at a BW Businessworld awards function, Deep wasn’t too happy about foreign companies steamrolling the Indian startups on their turf. About the government’s lax approach to this Deep said, “Look if you can’t supports us [Indian companies] and make it easier, can you at least make it a level playing field?”
This FICCI digital travel summit will likely be a frequent event according to the organizing partners. FICCI, a government aligned commerce body, will actively promote the travel industry while giving Indian travel companies its due attention on a public platform.
A move likely to put a smile on the MakeMyTrip Group CEO’s face.
BW Reporters
Regina is a reporter for BW Businessworld. In her previous assignments, she has worked with Independent television Network as a news anchor and reporter in Sri Lanka
