B2B key to online supremacy
Brings to you the best practices and strategic intent the leading players in the online travel space have built into their DNA to become the biggest giant in this segment.
It is the service of a particular online player, which can help him stand apart from the crowd
The online travel space in India has seen many new entrants who have got into the industry with an ambition to become the biggest online travel company. However, still, none of the companies can yet claim to have acquired a sizeable quantum of the market to be crowned the undisputed king. It has led to overcrowding in the market, which gives a mandate for an exigent need to stand out in the crowd. The companies with high growth rate, which strive to grow faster than others in the travel, have to necessarily operate in the online space. As per Vikram Malhi, Country Head, Expedia India, “India is expected to be home to the fastest growing total and online travel market in the APAC region in 2012 with gross bookings expected to touch $24.6 bn. Online travel is the driving force in the ecommerce segment with a global contribution of 70 per cent of all e-commerce activities. According to a recent PhocusWright report, the online travel market is expected to grow more than any other market through 2013, especially with the online travel penetration set to cross 36 per cent from a current level of 31 per cent. With a rise in the penetration further to Tier II and III cities, there will be an exponential growth in the online travel booking segment. Online bookings are where the future for the Indian travel industry lies.”
The cut throat competition in India has forced the online travel companies to continuously evolve. Here, Neelu Singh, COO, Ezeego1.com, acknowledges that the online travel companies in India have gone beyond mere providing just online travel ticketing services to the customers. “There are offline payment options like cash on delivery that helps those customers to make payments who are not ready to part with their credit cards or who still want to choose the traditional method of payment by cash,” Singh adds.
“While there may not be much scope for differentiation in the breadth of offerings themselves, the critical differentiators that will determine the success of an OTA are the value-adds in terms of innovation - from packaging to delivery of these services, example, smartbundling to offer the bestvalue products, technology that enables access in medium-of-choice etc.,” said Rajesh Magow, Co- Founder, COO & CFO, MakeMyTrip.
Standing out in a crowded market - The entire focus of the key online players is to build on a proposition that helps them stand out in the crowd and strike riches. Malhi here showcases Expedia’s strength in terms of striking the best value proposition. “As we see, our inherent strengths emanate from the fact that we have access to the largest global inventory of 1,55,000 hotels, 438 flights and 7,000 holiday activities, which enable us to get the price points & deals that noone else in the market can offer,” said Malhi.
“We have innovative & unique services like build your own Trip, 72 Hr Sale, Deal Hunter and Last Minute Deals in addition to the regular seasonal campaigns that assist the traveller to customise travel per his need. In fact, only we offer discounts and deals even during the peak seasons, coupled with the flexibility in modes of payment ranging from credit to debit card, net-banking to even cash,” he adds.
Magow here highlights that MakeMyTrip offers a holistic set of services. “We deliver a combination of convenient booking tools, global selection, a wealth of organised content & reviews, the ability to compare and filter hotel features and pricing along, and trusted service that can’t be duplicated by another OTA. While, we consider the other players healthy competition, the depth and breadth of our global supply and demand footprints afford us a long-term, sustainable growth trajectory that we believe no other company can match,” said Magow.
Interestingly, Ankush Nijhawan, Co Founder & Chief Executive Officer, Travel Boutique Online, here bets on entry barriers created by use of the state-of-the-art technology. “In order to sustain in the travel business from long term perspective, one has to stand out in this growing crowd of online players. Our technology is our differentiator and acts as an entry barrier for competition,” he said.
“We continuously invest in technology to create innovative product for our part- ners. We act as one stop online platform for our agents by providing widest travel products and content at best prices and maintain financial transparency by providing real time reports as well as offer efficient and timely personalised customer service to our agents. We aggregate largest hotel inventory in the country and would optimise our service and rates to our partners and thrive to become a leader in the holidays & packages vertical as well. We are expanding our reach and have moved into Tier-II and Tier-III cities like Nagpur, Pune, Calicut and Surat and are also focussed to grow to the optimum large existing markets like Mumbai, Chennai etc,” he added.
Not allowing the online tech majors forget the backend operations, Parikshit Sawhney, Managing Director, Forerepresentations said, “It is the service of a particular online player, which can help him stand apart from the crowd. Our initiative from day one has been focussed on service and on giving a fair value to our customers. Of course, the quality of the online interface and an error free experience do help but ultimately it’s the backend support, ease of operation and hassle free payment solutions which perform in the long run.”
It’s for the intense competition and determination to stand out of the crowd that most OTAs had undertaken an aggressive acquisition strategy. According to Pratik Mazumder, Head of Marketing & Strategic Alliance at Yatra, “Yatra has come with a total of four big acquisitions, which have broadened our horizons and offerings as a leading travel company. We thrive to constantly innovate with the new technology and shift to mobile apps too over the coming years. We are very much opti- mistic about our future and thus are focussing to strengthen our position in the market, especially in hotel and holiday bookings. Our recent acquisition of Travelguru is likely to transform the offerings and will immensely contribute towards domestic holiday bookings as well as the hotel offerings.”
Extending reach
In the war like situation in the online travel space, the winner will definitely be determined by the B2B ammunition these leading players have in their kitty. Hence, all of them have a well-defined task to work with smaller agents and make them act as their extended reach.
“Expedia, as a practice, ensures exhaustive and enriching trainings for B2B partners. We have robust strategy in place for our B2B network, beginning with a multi tiered structure aimed at incentivising more producing agent. For Instance, if we were to talk about our agents, a platinum agent gets 11.5 per cent commission compared to a standard agent who gets 10 per cent. Other than this, we regularly introduce seasonal promotions. Another widely appreciated Expedia initiative is the offer newsletter. This bulletin reaches our partners and agents regularly, giving them insights on key Expedia offerings, augmentations and developments. We also have about 11 brand ambassadors across India, who are our top producing agents,” says Malhi.
Here, Magow also quickly highlights that MakeMyTrip has a strong presence across India through franchise and personal stores. “We have a total of 20 company- owned outlets and 38 franchised outlets in India. We plan to expand further. Training is an integral part of our franchisee module. Apart from having standard operating processes, destination guides, online tools and product reservoirs, we also make sure that the franchisee sellers spend quality time with the service delivery team to understand the important processes. We also make sure that a senior seller is with them for on-the-job training on various sales techniques. These training programmes are periodical in nature and are mostly done before the peak season,” he added.
Forerepresentations, as per Sawhney, has always had a wish tree rewards program, which has been an inherent part of its booking process right from the start. “The program offers gifts and incentives to the front line bookers based on the points earned by them. At present, we have 1000 active agents from a total of 3500 registered agents all across India, Middle East, Europe and UK,” he added. Nijhawan relies on road shows across India, advertisements on its portal and will launch a mobile application by early 2013 to increase reach and also provide value added services to our agents.