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MakeMyTrip is covering untapped corporate travel segment, says business head Ranjeet Oak

SMEs have become a lot more comfortable with online transactions. In addition, the online payments have really been driven hard over the last one year in India, says Ranjeet Oak.

twitter-logo Manu Kaushik   New Delhi     Last Updated: March 8, 2018  | 22:01 IST
MakeMyTrip is covering untapped corporate travel segment, says business head Ranjeet Oak
Photo credit: Reuters

The online travel market is making new strides. After focussing on the consumer market, the online travel agents (OTAs) such as MakeMyTrip (MMT) and Yatra are tapping the corporate sector, particularly small and medium enterprises (SMEs), with new products tailored for them. Yatra, for instance, launched a self-booking platform for SMEs this year, under which the clients would get corporate deals with minimum or no cancellation and rescheduling charges. In addition, the SME customers can manage their employee profiles, travel policy compliance, and approval workflow using the product. MMT launched a similar product MyBiz in 2017. In a conversation with Business Today's Manu Kaushik, MMT's chief business officer Ranjeet Oak talks about the product development and its journey so far. Here are the excerpts.

What is the idea behind this product, and it's potential?

MMT is a market share leader in the business-to-consumer travel side. It is the largest online player in India, and we have been steadily building our market share over the past few years. On the consumer side, we are looking at what we have left untapped, which is the corporate travel segment. As per our estimate, it is a $30-billion market in India alone, and it is a fragmented market with few TMCs [travel management companies] covering top companies. A large portion of SMEs that do travel for business have the option of an online tool, which helps them get the same advantages that large companies get for their business travels.

SMEs have become a lot more comfortable with online transactions. In addition, the online payments have really been driven hard over the last one year in India. The entire GST compliance and a chance to get Input Tax Credit throw up a new opportunity. All these factors encouraged us to come up with a tech-based solution, which is to bring all the consumer-side technology to the corporate travel bookings. The tool is available both on the desktop and the app.

Can you explain the typical travel booking processes in large corporations and SMEs?

In the large corporations, there would be a TMC who would typically do a lot of bookings of flights. In a large company, there will be a process where you need to get an approval, and the travel requisition will be done through an email that will go to the manager. Once the approval is done, the travel desk sends a couple of travel options, the employee selects one of the options, and then the travel desk sends the ticket. They do the booking using their own systems.

There are a lot of TMCs such as Carlson Wagonlit and FCM Travel, etc. At the global level, there is American Express. There are many companies that provide travel services to large organisations. From a large organisation point-of-view, the travel policy management is required and adds a level of complexity into the system. Anyway, the requisition process takes between 12-18 hours. The second thing is that if a company has an offline travel management firm, which might be a standalone travel operator, there is a lot of opacity in the pricing. Because, only a couple of options are sent by the offline travel company to the traveller, and there is no way for the traveller to check what the actual pricing is. All these things create problems in the system.

The mid-and small-size companies would not get the advantage of any TMC because they will first need to give a minimum amount of travel as a guarantee for a TMC to be interested. We felt that there was an opportunity for us to tackle this problem using technology, and we have built in all these processes in the backend network, including travel policy management, approval flow, centralised payment and billing options, centralised GST upload and invoicing. It has given smaller companies an opportunity to sign up on the platform, get advantage of all these things without any requirement of minimum travel criteria. Also, we have aggregated the demand across SMEs and we continue to do that as we build our customer base.

So you aggregate demand?

When we aggregate demand, we can supply and get better rates and better options for our [SME] customers. The classic example would be that since we are able to predict an aggregated demand across a location such as Aerocity in Delhi, we know we are going to have thousand nights booked across our customer in Aerocity. We go back and work with our [hotel] partners in Aerocity to see what [rates] we can give our customers. It's a win-win situation. For our [hotel] partners, they get their hotel rooms filled, and for the SME customers, they get rates as if they are a large company. This is bringing value to SMEs because they are part of a large aggregated demand pool. I think that is helping our SME customers save a significant amount when they are booking through us.

In the last quarter, we have saved about a million dollars for over 4,000 SMEs booking through us. We have close to 25,000 registered SMEs on our platform but over 4000 are active.

Why are you targeting SMEs, and not large corporations?

The philosophy of our product is to cater to small companies and then make it resonate for a large company. We are surprised that we already have some inbound interest from large companies to convert their [existing] booking process to this technology-based booking process. We are keeping it completely technology-based so that it can be scaled, and transparent pricing can go to the customer. If a large company comes on board and says I need an offline-ish process, we politely decline. Right now, large companies are in testing process. They have put in some of their people on to our product, and within the next quarter we should be making some announcements about large companies shifting to this platform. Our target has largely been fragmented travel segment, which is over $7 billion (corporate SME) market for just flights and hotels. The total business travel market in India is at about $30 billion.

What is the average size of the transactions that are happening through SMEs?

From an average transaction value, I would say it's slightly higher than the overall business-to-consumer [segment] numbers. What we have seen is there is a lot more stickiness. There are a few [other] products available in the market, which have not been able to scale up because of either branding or customer acquisition issues. Some of the larger players who operate with large companies have launched their mobile products. They are entering into the fray to make sure that this part of the market is turned completely from offline to online. We probably have the largest bandwidth of hotels as well as the partnerships because of the market share on the business-to-consumer side. We will keep that intact to ensure that our customers get the best rates on the hotel side.

Does your competition have similar mobile apps?

Not all of them. Some are entering into the market with mobile app. The big difference that we bring to the table is that our [MyBiz] mobile app has all the features that have worked on the business-to-consumer side. Interestingly, we have the same app [for both personal and corporate bookings], and customers can actually toggle between the personal and corporate profiles [on the same app].

How much booking is coming from mobile and desktop?

Currently, we have a split of around 50-50 on desktop and mobile. On the business-to-consumer side, 70 per cent of the bookings are coming through individuals.

 

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