Paytm ramps up travel category after blockbuster start

India’s mobile payments and marketplace platform Paytm has its sights set on becoming a major player in the country’s online travel space.

The business is a relative newcomer to travel – it only started to sell air last June with rail coming online shortly afterwards. So far it claims to have sold 10 million tickets (air, bus, rail and hotels), adding that this January the travel vertical “crossed $500 million in annualized GMV.”

It also claims that it has become India’s leading B2C seller of rail tickets.

Last year, Paytm said that it was earmarking INR 300 crore ($45 million) to grow its travel vertical. Today’s announcement says that it is opening a dedicated office for its travel unit in Bangalore which will employ 100 people across business, operations and technology functions.

And these new employees are likely to be kept busy – Abhishek Rajan, Paytm’s vice president, said; “This year we plan to further accelerate our growth and firmly establish ourselves as a dominant player in the online travel market,” adding that it is looking to grow the business fourfold by the end of 2017.

Paytm’s marketplace approach to travel has been noted by India’s biggest OTA, MakeMyTrip. On the latest earnings call, its CEO Deep Kalra named Paytm as one of the significant players in the Indian market, noting that it was “aggressive” in terms of air, bus and rail, less so in hotels which is where the traditional OTAs are strong.

However, as MakeMyTrip and others have said, lower value purchases such as rail or bus tickets are an ideal way to shift behaviours from offline to online and prepare the ground for bigger higher-margin online purchases such as hotels.

Paytm has 180 million users in India and believes that it can get half a billion Indians to use its various services. It is the consumer brand of India’s biggest internet business One97Communciations. Investors in One97 include Alibaba Group, China’s biggest internet firm which has a travel marketplace of its own in Alitrip.

The Chinese connection to Paytm is relevant in light of Ctrip and Tencent’s ownership and involvement with the newly created MakeMyTrip/Ibibo Group.

Yatra’s news a few weeks ago that it was introducing a marketplace to sit alongside its established OTA model is another development which is shaking up India’s already dynamic online travel sector.

Related news:
Yatra numbers show scale of marketing spend gap with MakeMyTrip (Feb17)
MakeMyTrip commits to growth as Ibibo integration gets under way (Feb17)

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