In the year 2021, Cleartrip, an online travel aggregator, faced the unfortunate consequences of the COVID-19 pandemic. Global travel restrictions led to a significant downturn in business for Cleartrip and other Online Travel Aggregators (OTAs). Amidst this challenging environment, Cleartrip’s revenue for the fiscal year 2020-21 plummeted to $14.6 million, marking a drastic 67% decline from the previous year’s revenue, according to Tracxn data. In an unexpected turn of events, ecommerce giant Flipkart stepped in and acquired Cleartrip in April 2021, although the exact amount of the acquisition remained undisclosed.
Fast forward to 2023, more than two years after the acquisition, Cleartrip has been making noteworthy strides, reporting an annual growth of 2X in its business. The company anticipates sustaining this growth trajectory as it ventures into new categories. Cleartrip’s overarching ambition is to emerge as a comprehensive travel superapp. Post-acquisition, Cleartrip’s strategic focus zeroed in on three core areas: enhancing customer service, refining design and technology, and diversifying its service portfolio. The company envisions catering to unmet needs of Indian travelers, a niche it believes has been underserved by existing OTAs.
Cleartrip’s CEO, Ayyappan R, elucidates that while conventional OTAs primarily address the transactional aspects of travel like searching and booking, Cleartrip aims to pivot towards a discovery-based platform. It seeks to facilitate browsing, planning, and eventually booking, creating an immersive travel experience for users. This strategic shift is rooted in the understanding that travelers often need more than just transactional support, leading Cleartrip to tap into the potentially untapped market of exploratory travel planning.
Thankfully for Cleartrip, the travel industry is predicted to regain pre-pandemic levels of activity by the end of this year. Mordor Intelligence projects substantial growth in India’s online travel market, estimated to surge from $15.60 billion in 2023 to $25.69 billion by 2028, reflecting a Compound Annual Growth Rate (CAGR) of 10.49%. A study by the Federation of Indian Chambers of Commerce and Industry further predicts that the Indian travel industry will burgeon from $70 billion in FY20 to $125 billion in FY27.
However, the online segment’s penetration in India’s travel market stands at a mere 25%. Preferences for online bookings vary across different travel categories. While the online-offline split in domestic airline bookings is roughly 50:50, it widens in the case of international air travel and bus travel, where online penetration is 25% and 20%, respectively. Train journeys, facilitated by the government-owned IRCTC, exhibit a higher online penetration of 80%. For hotel bookings, a considerable 75-80% of transactions remain offline.
Navigating the intricacies of India’s diverse travel booking market, Cleartrip aims to cater particularly to the 18-36 age demographic known for their adventurous spirit and eagerness to explore. Post-acquisition, Cleartrip initiated a series of changes aimed at enhancing user experience. Timely refunds, flexible travel itineraries, and improved call center services are some of the enhancements geared towards making travel planning seamless and enjoyable for customers.
Innovation lies at the heart of Cleartrip’s evolution, with a strong emphasis on user-centric product development. The company’s investments in technology integration and collaborations within the travel industry contribute to a richer customer experience. Diversification has also been a key strategy for Cleartrip post-acquisition. Expanding beyond its traditional flight and hotel offerings, Cleartrip now covers bus reservations, bolstering its service portfolio and boosting its business.
Cleartrip’s value philosophy revolves around affordability, a crucial aspect in India’s price-sensitive market. The company seeks to provide maximum value to its customers by either reducing costs or offering additional benefits. Flexible financing plans, including installment-based payments and buy-now-pay-later schemes, are part of Cleartrip’s initiatives to cater to customer affordability.
Cleartrip acknowledges the significant influence of Flipkart on its operations. The alignment in customer-centric approach and the mission to fulfill unmet customer needs has fueled Cleartrip’s expansion and diversification efforts. The integration with Flipkart also opens doors to a vast customer base of over 450 million users, amplifying Cleartrip’s reach.
Looking ahead, Cleartrip is optimistic about its growth trajectory, driven by a commitment to customer satisfaction. The company’s overarching vision is to transform from a platform where users finalize their travel plans to one where they embark on a journey of exploration, choosing their destinations through Cleartrip’s immersive offerings.
In conclusion, Cleartrip’s journey from weathering the pandemic’s challenges to experiencing remarkable growth post-acquisition paints a picture of resilience and adaptability. With its evolving approach and determination to address unmet traveler needs, Cleartrip is poised to capitalize on India’s expanding travel market and redefine the way travelers plan their journeys.
