India’s largest online travel company MakeMyTrip is sharpening its focus on overseas markets.
Earlier this week, the Gurugram-based company entered into an agreement with the American travel platform TripAdvisor to enable Indian travelers to book 250,000 local tours and activities across 100 global destinations.
Taking a leaf out of the playbook of Ctrip, China’s largest online travel group, which is also MakeMyTrip’s biggest shareholder, the Indian firm is now starting to cash in on the fast-growing outbound traveler market from India.
Over the last 20 years, Ctrip gained global prominence riding on the growth of Chinese outbound travelers. From a mere 10.5 million overseas trips in 2001, the outbound visits by Chinese travelers grew to 149.7 million, a whopping increase of 1326%. China’s outbound tourism market is set to surpass USD 270 billion by 2025.
The Indian outbound travel market is projected to cross USD 42 billion over the next five years. Empowered by growing disposable income, rising internet and smartphone adoption, and better air connectivity to foreign countries, the Indian middle class is increasingly aspiring to travel abroad, particularly to Southeast Asian countries, which have emerged as affordable destinations over the years.
The data compiled by the Ministry of Tourism shows there were 23.94 million overseas trips by Indian travelers in 2017. According to industry estimates, India has 25 million outbound travelers at present.
The number of Indians traveling overseas is expected to grow two-fold, making India one of the fastest-growing outbound travel markets globally, MakeMyTrip said in a press release, adding that it aims to maximize its reach to the 25 million Indian travelers going overseas with the recent tie-up.
Outbound travel has been growing phenomenally at 50% plus rate year on year for the company, Rajesh Magow, MakeMyTrip’s co-founder and CEO said in a recent interview.
“In the air ticketing flight segment, we have seen year on year growth of 15.7%, largely driven by international air ticketing segment. International hotels and packages is one of the fastest-growing segments and is expected to see sustained growth in the short and long term,” said the company’s spokesperson in an email response to KrASIA.
The 19-year-old NASDAQ-listed company recorded gross bookings worth USD 5.4 billion for the fiscal year ended March 2019. In the last quarter, MakeMyTrip “contracted with over 8,000 international properties” as part of its strategy to expand the hotels segment globally.
The company said the partnership with TripAdvisor is “the first international step” of its Experiences business. MakeMyTrip had launched its Experiences offering–local activities, events, and food-related tours– in October last year for domestic travelers to create high-frequency use-cases in order to drive traffic and transactions.
“We have seen significant growth in international bookings on our platform. We will continue to make investments in technology, product, supply and brand to achieve continued robust long term growth, with focus on outbound travel,” the MakeMyTrip spokesperson said.
MakeMyTrip is also exploring synergies with Ctrip to grow its international presence.
Ctrip owns 49% shares of MakeMyTrip, after the share swap deal with Naspers in April 2019. The South African internet giant and early backer of Tencent, had exchanged its stake in MakeMyTrip for 5.6% of Ctrip.
Ctrip first invested in MakeMyTrip in January 2016. The USD 180-million deal then gave the Chinese travel giant a 26.6% shareholding in its Indian peer. In May 2017, Ctrip along with Naspers invested USD 330 million into MakeMyTrip after it completed the acquisition of its rival Ibibo in January 2017.
“Ctrip has done a lot of work in enhancing their vision to go beyond China — they acquired Skyscanner in the past, invested in Travelfusion and others. Behind the scenes, they are working on fixing technology and the supply side,” CEO Magow had said in an interview in July. “They [Ctrip] have invested a lot to build the international supply for all foreign destinations, both in hotels and flights, and MakeMyTrip can benefit from the work that they have done, especially in the last four years.”
“Potential synergies can be in the outbound category, where we are looking to grow. There is a lot of headroom,” he added.