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Business News/ Companies / People/  We want to be a super-app for travel: MakeMyTrip CEO
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We want to be a super-app for travel: MakeMyTrip CEO

In every quarter, 30% of our transactions come from new users, while 70% come from repeat customers, Magow said

Rajesh Magow, co-founder and group CEO, MakeMyTrip Ltd.Premium
Rajesh Magow, co-founder and group CEO, MakeMyTrip Ltd.

MUMBAI : For MakeMyTrip, the pandemic opened up opportunities for transforming its business and solve all travel use cases, as it embarked on a journey to be a one-stop shop for all things travel, said co-founder and group chief executive Rajesh Magow in an interview. Speaking about expanding to smaller towns, Magow said it used the downcycle to improve its product add more language support and voice features, to be ready for the long-term opportunities. Edited excerpts:

You came out of the pandemic with a stronger balance sheet. What did you do to achieve it?

Like the many tough times and downcycles in the past, running a business is never a straight line, and always comes with its own challenges, roadblocks, etc. And the pandemic was clearly, in the context of the travel industry specifically, perhaps the mother of all the challenges. It was clearly different by any order of magnitude. But we believe the most interesting challenging situation invariably comes with a long-term opportunity, if you see it from that lens. If you do not, you will miss the bus. So, ours was a two-pronged strategy to deal with this massive challenge. One is crisis management, as at the onset of covid when the lockdown happened, it wasn’t clear whether it will be there for two long years. Everybody was conjecturing, nobody really had a cue. Our sense was that it will definitely be long—a year to 15 months— but we didn’t think that it is going to be two years. Yes, there were recovery waves in between, but overall, it was like two-plus years from a full business recovery standpoint. But during these two years, though there was hardly any silver lining, in respect to our business, there was this opportunity of giving us time, bandwidth and ample resources, considering that regular business was not happening.

We have a tech and product team strength of 1,000-plus people, and the pandemic allowed us to think about what we can possibly do more. In many ways, we started attacking those areas that we could potentially transform, or those that would help us give the next level of growth.

So, how did you use this tech and product team?

In terms of just new developments of the platforms or getting into new business and customer segment, we started investing our resources, putting people on the job to build multiple platforms. We had our B2C platform, which is the website and app, and we had started building our corporate platform pre-pandemic, but we significantly enhanced capability and added more products in there. Then we built a travel agent platform, myPartner, and another, myBiz.

And then, we built a trip money platform, which is also a mini fintech platform, with three sub-verticals — insurance, consumer lending, and forex. We recently invested in a company called BookMyForex. Then we built an advertisement platform. So now, when you go on our platform, you will see our partners have the option to advertise on our platforms. So, it’s not necessarily only transactions, but if somebody is looking for visibility, like tourism boards, they can leverage our platform.

It makes sense for them as their goal is to create more and more awareness about the destination, and we have the traffic, which is probably the most qualified high-intent travel traffic. I will say, building the new platforms, and ensuring we leverage our technology, product, and supply team, to focus more on what could be future growth levers, was one theme. Two, was about enhancing customer experience to a completely different level with several differentiated offerings with lots of personalised contexts, rather than a plain vanilla booking. These were the two big themes.

You have been talking about going deep, catering to Bharat. Is there enough business opportunity?

Going deep into Bharat was a strategic thought we had during the pandemic. Over the last few years, the top metro cities, or let’s say, top 10 cities, have been giving all the internet traffic to pretty much all the categories that are into e-commerce business in India. The idea was to go beyond, build capabilities and competencies, and offerings for our customers, which can go beyond the 10 cities.

To give you some numbers, in every quarter, 30% of our transactions come from new users, while 70% come from repeat customers. Out of this 30%, 40% come from tier two, and tier three. So, about 12% of total transactions would be coming in from tier two, and three, and it’s definitely growing.

To help growth, our platform now has support in Hindi and Tamil, for our flights and rail business. Bus and hotel are coming up. We want to test the two languages, and then expand to more. We are getting some traction already, and this is going to be our long-term initiative. We want to add potentially a voice feature, where you can speak into the mic, give instructions and book.

For redBus commuters, bookings, which were earlier across 5,000 towns, have now gone up to 7,500 plus unique towns. So, you can imagine where all it has penetrated. It is definitely beyond even tiers III and IV. A large part of India travels by bus and rail. If you look at destinations, about 64% are going to tier II and III cities. From a source perspective, 36% of bookings are coming from tier two and three cities.

You reported small net profit in Q3. What helped you turn profitable?

What was very interesting and most relevant post-pandemic, was the overall group turning profitable at a scale, and not just bare unit economics. It was a function of a couple of things — some smart move on cost rationalization and cost modelling from the restructuring standpoint. Some, thanks to automation, and by moving from a fixed cost to a semi-variable or a variable cost structure, and then the overall recovery, as well as rationalisation of sales, promotions and discounts.

But some of your competitors are going hyper on promotions and discounts.

It’s been happening a little bit more on the flight side, but not on the hotel side. If you really see the competitive landscape, you would realize, in the Indian OTAs market, most are transport players. They might have an offering on hotels, but the numbers are very very small.

Our benchmark is very internal, and this is not an arrogant statement, but we end up competing with ourselves first, just to keep improving, keep raising the bar all the time and see what is that we can do with a customer focus. But when you look at the players in the market, they are very focused on transport products to start with — domestic flights etc. We’ve seen this in the past, and you keep tackling that as a tactical move every quarter, every day, etc. But don’t lose focus on what is going to win you the game ultimately. And with that positioning only, and with that strategy only in all fairness over these two decades we have been able to keep our nose ahead.

In terms of just our positioning in the market, and very humbly more from a consumer-focus standpoint, because we get a huge amount of repeat. If you look at our market share of domestic flights, despite whatever might be going on in the market, we have a 30% market share of the total market today, which used to be 27% pre-pandemic. The point I’m trying to make is that the more you make your brand on the back of experience reliable and trustworthy, people will keep coming back to you. Yes, they would be getting tempted by the offers, but those offers historically even Paytm used to give, and when Paytm stopped giving it they fall back on the more reliable and trustworthy partner.

What do you mean by one-stop shop for travel?

Our vision has been that if there is one travel use case that you could possibly think of, you should be thinking of one of our brands — MakeMyTrip, GoIbibo or redBus. We don’t want to go beyond travel, so from a travel offering standpoint, we have covered everything.

Any travel use case - from booking for a trip to Darbhanga to an overnight bus trip in a luxury Volvo sleeper bus, and from an intercity cab to airport transfers along with your flights. We should be able to offer any kind of accommodation that you want - all segments of hotels, homestays etc. And of course domestic and international flights, low-cost carriers, full service, whatever.

If you want to book a holiday package, we can give you a bundled product and if you want to look at ancillary products, whether it’s travel insurance or Forex or a loan for your holiday travel, we should be able to offer you that also. And domestically, and internationally full coverage.

So only visa services are remaining?

We earlier used to help with Visas too, but it got disrupted due to the pandemic. Our platform is still there and we definitely want to bring back the Visa Services. And now, with more and more digitization happening, a lot of the embassies are willing to just move electronically, rather than the good old paperwork. In fact that the other one, which was their pre-pandemic, we haven’t really gone fully live with, is on destination activities, the excursion trips etc. We do have it as part of our holiday offering as part of our packages but we want to also put it up there like an a la carte offering as well.

What about your plans for international expansion?

We have done our geographical expansion and launched in GCC right in the middle of the pandemic. Our product was ready and as the market was just beginning to open up, we launched in the GCC market. We are focusing on UAE right now for the UAE natives and the ex-pat market there. Later, we want to go to Saudi Arabia as well.

Similarly, we are going to take our redBus playbook, which is our online bus booking platform, to many international cities. So squarely staying in travel, but solving for every problem of travel.

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ABOUT THE AUTHOR
Gaurav Laghate
Gaurav Laghate is the chief of Mint's Consumer Bureau that covers FMCG, consumer durables, retail, media, advertising, hospitality, luxury and the business of sports. An accomplished business journalist with a career spanning over 15 years, he has reported on the significant advancements in the media and entertainment industry, as well as the business of sports. Beyond his role as a journalist, Gaurav is recognised as a steadfast observer of the media landscape, having spoken at several industry events and panels.
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Published: 06 Feb 2023, 12:30 AM IST
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