RACE TO $1BN

HOW WEGO’S MID­DLE EAST GAM­BLE IS PAY­ING OFF

CEO Middle East - - CONTENTS -

What’s the story be­hind Wego? Wego’s found­ing story is in equal parts about scratch­ing an itch to en­hance the travel shop­ping ex­pe­ri­ence and sens­ing a good busi­ness op­por­tu­nity. I stud­ied the travel metasearch pi­o­neers in the US when in a re­gional prod­uct role at Yahoo! in Sin­ga­pore. From a con­sumer per­spec­tive, I thought the core propo­si­tion, be­ing able to browse the en­tire on­line travel mar­ket in one place, was clearly su­pe­rior to any of­fered by the big on­line travel agen­cies of the day. In fact, metasearch was some­thing I wanted to use when plan­ning my own trav­els. But at that time, the model didn’t ex­ist out­side of the US. I dis­cussed this new busi­ness model with my co­founder who was work­ing on ecom­merce with IHG, the global ho­tel chain. His US col­leagues were wit­ness­ing great re­sults from early mar­ket­ing in­vest­ments into these travel metasearch pi­o­neers. There was a clear busi­ness op­por­tu­nity to take travel metasearch be­yond the US. So, we teamed up and did just that.

There are new travel book­ing plat­forms pop­ping up all over the Mid­dle East. Is the mar­ket still not sat­u­rated or are there just that many un­tapped niches?

When we first en­tered the Mid­dle East about five years ago, no sin­gle brand was ded­i­cated to on­line travel at such a scale in the re­gion. Book­ing on­line meant go­ing to each air­line or ho­tel web­site and check­ing prices. Fast for­ward five years, and MENA’s on­line travel space is ex­pe­ri­enc­ing a Cam­brian ex­plo­sion in terms of new busi­ness mod­els, brands and prod­ucts en­ter­ing the mar­ket. To­day, Wego has over 50 lo­cal on­line travel agen­cies (OTAs) in MENA ac­tive on the web­site. These lo­cal brands com­pete in the Wego mar­ket­place with global play­ers such as Book­ing.com and Ex­pe­dia, and also di­rectly with air­line and ho­tel chains. There really couldn’t be a bet­ter time to be a travel shop­per.

But is there still room for the travel mar­ket to grow?

Cur­rently, the MENA on­line travel mar­ket is vi­brant but still un­der-pen­e­trated com­pared to more ma­ture western mar­kets. By most es­ti­mates, only 30 per­cent of travel orig­i­nat­ing in the MENA re­gion is booked on­line. This means that there is plenty of time for the mar­ket to truly tran­si­tion to­wards be­com­ing on­line-first and grow to its max­i­mum po­ten­tial.

An what makes Wego stand out from the crowd?

Wego is the only on­line travel player run­ning a mar­ket­place model. With­out Wego, if you wanted to com­pare all the prod­ucts and deals in the mar­ket­place you would need to visit dozens of web­sites or in­stall sev­eral dif­fer­ent

travel apps. This is as­sum­ing you know which web­sites to look at. Add onto that spend­ing hours and hours search­ing and com­par­ing what you’ve found. On the other hand, with Wego, you can search the en­tire travel mar­ket with just one app. As new travel book­ing play­ers join the crowd and are added to Wego’s mar­ket­place, our value propo­si­tion ac­tu­ally gets stronger.

What’s the sin­gle big­gest chal­lenge fac­ing Wego to­day?

I think the big­gest is­sue fac­ing the on­line travel in­dus­try in the Mid­dle East to­day are prob­a­bly still on­line pay­ments. The re­gion’s credit card is­suance rates are low and card trans­ac­tion fail­ure rates are high. That’s why bank-driven plat­forms such as SADAD and Knets are a step in the right di­rec­tion, but they are still not uni­ver­sally ac­cepted or sim­ple to use as dig­i­tal-only pay­ment plat­forms such as China’s Ali­pay or WeChat Pay.

An­other prob­lem, and a larger one fac­ing the travel in­dus­try, is the sheer amount of fric­tion that visas and air­port se­cu­rity add to the process of get­ting from A to B. Fig­ur­ing out who is and isn’t an im­mi­gra­tion or se­cu­rity risk is fun­da­men­tally a big data prob­lem. This is­sue could be ad­dressed through the bet­ter in­for­ma­tion shar­ing be­tween trav­ellers, gov­ern­ments, air­lines and air­ports. The in­dus­try and gov­ern­ments could make travel so much eas­ier, cheaper, faster and just more pleas­ant.

What has been the most im­por­tant/big­gest de­ci­sion you’ve had to make?

For Wego to en­ter the Mid­dle East. We were ini­tially fo­cused on the Asian mar­kets. But that changed in 2014, when af­ter a few vis­its to the Mid­dle East I re­alised that MENA con­sumers were trav­el­ling fre­quently and spend­ing a lot per trip, but were poorly served in terms of on­line book­ing op­tions. The con­di­tions seemed right for the busi­ness to move on­line fairly quickly. Based on these in­sights, we in­vested and ex­panded our foot­print to in­clude MENA, which now is a very im­por­tant part of our busi­ness.

How have you fared in 2018 given the re­gional eco­nomic cli­mate?

In 2017 our plat­form gen­er­ated just over $500M worth of flights and ho­tel book­ings. This was quite a sig­nif­i­cant mile­stone for Wego when we achieved the num­ber in De­cem­ber last year. In 2018, our growth ac­cel­er­ated quite a bit, par­tic­u­larly in the MENA re­gion. Also, we are on track to gen­er­ate over $1 bil­lion in book­ings for the cal­en­dar year, 2018. Cross­ing the $1B mark will be a cause of much cel­e­bra­tion across the Wego of­fices.

What would you say to a new em­ployee about the fu­ture of your or­gan­i­sa­tion?

If you’re in­ter­ested in us­ing cut­ting edge tech­nolo­gies to build and mar­ket cool prod­ucts that help solve real-life travel prob­lems then you’ve come to the right place. Smart and driven peo­ple with a pas­sion for in­no­va­tion and love of prob­lem-solv­ing, tend to do very well at Wego. Peo­ple look­ing to be spoon-fed or who want a com­fort­able life would be bet­ter off work­ing else­where.

Fol­low­ing up on the pre­vi­ous ques­tion what are some key or­gan­i­sa­tional de­ci­sions you’ve made dur­ing at Wego?

By de­sign, Wego’s or­gan­i­sa­tion struc­ture is fairly flat, and com­mu­ni­ca­tions channels are very open. We also have a young and cul­tur­ally di­verse em­ployee base. As a re­sult, great ideas tend to come from all over the or­gan­i­sa­tion - es­pe­cially from our younger team mem­bers. In my opin­ion, China now leads the world in terms of dig­i­tal busi­ness model and prod­uct in­no­va­tion. So, we feel for­tu­nate to have quite a few staff mem­bers who are na­tive Chi­nese speak­ers and who can mon­i­tor and share good ideas that are seen to be tak­ing off in China.

Where do you see Wego in the next five years? The next decade?

As a prod­uct, we plan to con­tinue de­vel­op­ing in­no­va­tive new ser­vices which make it eas­ier for peo­ple to travel. This is why our prod­uct roadmap which ex­tends well be­yond 2020 and in­volves all sorts of prod­uct line ex­ten­sions, de­vel­op­ment for new plat­forms and a range of ex­cit­ing new fea­tures. As a brand, I want for Wego to be top of mind when any­one thinks about travel. Wego should also be the very first travel app users ab­so­lutely have to re-in­stall each time they setup a new phone. Fi­nally, as a com­pany, I think Wego has the po­ten­tial to be one of the largest on­line travel com­pa­nies in the world - with an emerg­ing mar­kets fo­cus.

“I THINK THE BIG­GEST IS­SUE FAC­ING THE ON­LINE TRAVEL IN­DUS­TRY IN THE MID­DLE EAST TO­DAY IS PROB­A­BLY STILL ON­LINE PAY­MENTS”

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On­line travel agen­cies at Wego in MENA num­ber over 50, says CEO Ross Veitch

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