Cleartrip a challenger in the OTA space started in 2007 and has recorded a 45% revenue CAGR since then. The company derives ~30% of revenue from international air ticketing, ~50% from domestic air ticketing and around 20% from hotels (largely domestic). The company does not sell holiday packages. Cleartrip used to derive ~25% of business from B2B two years ago, but has consciously reduced this to only 10% currently. The company believes that there is not much cross-selling possibility through the B2B channel.
Go Mobile – The Differentiator for Cleartrip
Cleartrip’s differentiator has been its strength in mobile, wherein the company has a mobile first approach and has invested in mobile ahead of the curve. Cleartrip had the first Native app for ios, and while they were late in Android, they have since caught up. Its mobile app has seen 3mn downloads, with ~8-10k downloads a day, which is comparable or higher than at MakeMyTrip. Cleartrip has 22-23% OTA market share in domestic air and believes it is the No.2 in mobile bookings, with 35% OTA market share in mobile (vs the 40% that MMYT has, on its estimates).
Mobile has grown phenomenally for Cleartrip, and currently 28% of hotel and 30% of air transactions are through mobile. Also, ~35% of mobile transactions are by “mobile first” customers (first-time customers). Further, 43% of its searches are via mobile now. According to the company it has ~7mn monthly visits, while MMYT has ~18mn.
Cleartrip was the first to feature online cancellation and amendments, allows modifications on mobiles now and is also launching mobile check-in for both air ticketing and hotel booking. Cleartrip has a strong tech platform to interact with hotels, wherein it runs a hotel extranet app for hoteliers to maintain supplier-side inventory. In addition, the company is also providing an app (channel manager) for hotels to manage inventory, rates, promotions etc, across OTAs. Cleartrip is very focused on technology and 45% of the tech team is dedicated to mobile development.
Business Strategy
The company is targeting the value seeker rather than the discount seeker and hence, the company’s average transaction size in both air and hotels is higher than the competition’s, as per management. Average transaction
size in domestic air is ~INR12,000, while in hotels it is ~INR7,000 (largely domestic).
Air business contributes to 80% of Cleartrip revenues – with 30% of overall revenues from international air ticketing and 50% of revenues from domestic air ticketing. Air net revenue margins are in the range of 6% and the company expects them to remain within the 5-6% range.
Cleartrip started Hotels business in 2010 with ~300 hotels and now it has relationships with over 15.5K hotels, ~20% of which are exclusive tie-ups. The company expects ~100% y-y growth in hotel transactions in FY15F.
Cleartrip has been marginally profitable in the last 9 months, and expects to be profitable over the full year.