Travel portal Cleartrip hopes to break even in FY15 and make a profit next year
Freshly capitalised from a $5.4 billion investment from its investor Concur Technologies, the portal is in no hurry go for another round of fund-raising.
Freshly capitalised from a $40 million funding from its investor Concur Technologies, the portal is in no hurry go for another round of fund-raising nor are there any immediate plans for an IPO, Stuart Crighton told ET in an interview.
" I think the important thing for us right now is to focus on the opportunities and not get too distracted with the exits," said Crighton. "Currently we are well capitalised and not raising any capital," he said.
At a time, when e-commerce companies such as Flipkart at rewriting the Indian investment story, Crighton's attitude may come as a surprise. But that's because his and company's focus is elsewhere, mostly on delivering innovative travel products at breakneck speed.
"The exciting thing for us now is that we have hit a critical velocity on the diffferent types of products that we are able to roll out now. We have seen a significant shift in our customers from a traditional PC behaviour to mobiles and tablets," he said.
Cleartrip currently has 32% of its search volumes and 25% of transactions coming through mobiles. On its train booking product, the chunk of mobile transactions is 90% of total.
Also, its mobile product has a 2.5 times conversion rate of the desktop in terms of customers actually buying products while browsing.
Cleartrip has moved fast on the mobile product, introducing functions such as ticket cancellations and new applications such "Waytogo" a route search tool, on it.
The pace of innovation has helped it build on market share, cross Yatra and get closer to market leader Makemytrip claims Crighton. Cleartrip has a share of about 23% while Yatra has 19%-20% in terms of overall gross bookings, he says.
A lot of growth on the mobile space is being driven by the SME entrepreneur, said Crighton. While the search is divided equally between leisure and corporate travel purposes, the actually growth driver in terms of bookings is corporate travel, he said.
Given the potential, a large chunk of Cleartrip's energies are now focussed on mobile and also building seamlessness between that and other mediums.
"So you book a trip to Dubai, you take a photograph of your expense receipt and load it. Your expense reports are already populated on your desktop before you get back to office," said Crighton as just one of the examples of the innovations he is working on.
Cleartrip still gets 57% of its revenue from domestic air tickets, although down from 90% a few years ago. Another 20% comes from international flights and the rest comes from hotel bookings.
But Cleartrip's revenue from the hotel segment is growing at 90%-100% every year.
In that segment Cleartrip competes with about eight companies in the market such as Agoda, Expedia, Hotels.com and Bookings.com.
The airline business too is improving.
"We have seen flash sales become more the norm rather than the exception. We have seen competition start to lower pricing. Go-Bangalore I think prices have dropped by about 35%. That's just going to happen a little bit bigger and more expansive across India now.
The consumer will benefit from that and we hope to see more positive growth in the market, after 8 quarters of fairly flat growth," said Crighton.
The growth story of travel portals in India is intrinsically linked although not similarly paced and volatile as low fare carriers in India. While Makemytrip started in 2000, Cleartrip and Yatra were founded in July and August 2006 around the same time when most low fare carriers currently flying in India started operating.
Their fates were linked too. The finances of travel portals have been impacted in the last few years with travel demand slowing down and Indian carriers incurring heavy losses quarter after quarter.
Most diversified to other business while others stopped selling airline tickets. Still others shut down.
"One of the things we said right from inception was that technology was critical because we felt technology was the most efficient wat to scale a business like ours," said Crighton.
Among the things that differentiate Cleartrip from the other 21,000 travel agents in the country is that it has never spread itself too thin. For instance, it never sold holiday packages.
It has also maintained a tight ship--a staff of 450 and no sales office in the country, compared to some of its competitors which have offices across the country and sales staff of thousands.
But Crighton said the challenges linked to innovation get tougher everyday, especially with the entry of so many travel companies with different kinds of products.
"Sir or seven years ago we were the sexy kids on the block. We were the disruptors of the traditional travel environment. Today we are in danger of becoming incumbents," he said.