India Mobile
Buy Mobiles, Cellphones
 |
 |
 |
 |
|
|
|
|
|
|
|
|
Investing in a Web site that sells flight tickets online can hardly go wrong,” says Promod Haque, Managing Partner of Norwest Venture Partners (NVP), a venture capital firm.
Speaking to eWorld, he elaborates on NVP’s recent investment in Yatra.com, a Web site that allows users to book flight tickets and hotel reservations online.
The travel industry is growing, both in terms of corporate travel as well as personal journeys, because the economy is booming and because the disposable income of the middle-class is rising every day, he says.
Also, with mobile and broadband penetration, not only is Internet usage going up, but the amount of time spent on the Internet by each unique user has also increased.
And finally, the number of credit card users is increasing by 30-35 per cent every year. Currently, this figure stands at 17 million users in India, he says.
Perhaps this, coupled with the fact that about 60 per cent of e-commerce transactions in India is travel-related, accounts for the number of Web sites that sell flight tickets today - Makemytrip.com, Yatra.com, Travelguru.com, Cleartrip.com, Ghumo.com and Flightraja.com.
Noel Swain, Vice-President (Marketing), Cleartrip.com, says travel e-commerce transactions currently represent about 2 per cent of flight ticket sales and are poised to grow at over 125 per cent annually to touch $900 million (Rs 4,140 crore) by 2009.
“By then online bookings will be at 15-20 per cent of the overall market.”
`Bloated figures’ caution
Some, however, are not so optimistic.
“Till m-commerce (mobile commerce) kicks in, this is not going to be so profitable,” says Vinay Gupta, CEO of Flightraja.com, the portal of a travel agency by the same name.
He admits that the value of flight ticket transactions stands at about Rs 2 crore a day, but adds that a lot of the figures in the industry are bloated. “It is only the youngsters and IT employees who book tickets and holiday packages online.”
His research leads him to believe that Rediff.com is the market leader, selling about 2,500 tickets a day, with Makemytrip.com following with 1,200 tickets, and other players - including Flightraja.com - selling about 250 each a day.
And rediff.com is merely a platform provider that allows other Web sites - flight ticket Web sites included - to provide links and information for those flight ticket sales, according to Manish Aggarwal, Vice-President (Brand Marketing), Rediff.com. This means that some of the above numbers could overlap.
Low-budget deals
Travel Web sites attract users by providing low-budget deals. Swain of Cleartrip.com says an online travel service allows you to compare airfares across airlines in one interface, gives you transparency of pricing, and provides customer support through the Web site’s call centre.
Haque says the pricing of flight tickets is such a complicated process that you could get a better deal flying at four in the morning rather than three in the afternoon, for instance, and the Web site provides the convenience of performing this calculation for the user.
And the number of travellers has increased from 48.7 million to 59.4 million between 2004-05 and 2005-06, and is projected to grow at 20 per cent every year, according to Aggarwal from Rediff.com.
Hotel booking is another burgeoning industry, says Haque.
In 2004-05, the value of online hotel bookings stood at Rs 29 lakh, rising to Rs 2.36 crore in 2005-06.
No wonder then that companies are vying with each other for advertising space in print, television and online.
Cleartrip.com plans to spend about Rs 30 crore in the first year on advertising, according to Swain.
Haque says Reliance and TV18 are involved in Yatra.com, and the company plans to use both media - Reliance mobile phones, Reliance Web Worlds and airtime on TV18 - to promote the portal.
Gupta at Flightraja.com believes that the next big thing is m-commerce transactions.
The portal partially provides this service, sending the PNR number to the user through SMS upon completion of the transaction.
