Coffee with the CEO – In conversation with Deep Kalra, Founder & Group CEO, MakeMyTrip
What does the future of the OTA industry in India look like?
In the last few years the Indian OTA industry has witnessed a consolidation and emergence of global players. OTAs in India have also invested in the customer-experience in the last few years. While most OTAs have focused on diversifying their portfolio to drive revenue and profitability, niche ventures such as RedBus have also been successful.
2013 was a landmark year for the Indian Internet space as mobile internet finally catapulted to take centre-stage. With growing adoption of smartphones, travel search and booking is also making a gradual but perceptible shift to this channel.
The long-term growth perspective for India’s travel market remains robust. There is emergence of new carriers, encouraging changes in the regulatory environment and a mind-set shift wherein travel is no longer considered a luxury.
New airlines launching operations and related investments are expected to have a positive impact on the landscape of Indian travel & tourism industry. Mobile will continue to be an important point of sale for the industry in the near future. Mobile Technologies will further propel e-commerce and travel buying experience in the coming years. Thus, more new customers will come into the fold of the Online Travel Ecosystem.
What do you think Indian companies in this industry can learn from their western counterparts?
Payment/ data security continues to be a concern-area for a majority of Indian travellers when booking online. We offer secure payment options to make the travel-buying experience convenient and safe, but efforts need to be made to educate the traveller on how to determine that their online transaction is being conducted in a safe and secure platform. Also, Indian companies have a lot of scope towards enhancing the post-sales service experience.
Also, global travel-industry players – OTAs, Airlines or Hotels – are very active in leveraging social media. Indian travel companies can utilize these platforms better to engage customers and inspire travel.
If you are to attribute MakeMyTrip’s success to just one thing, what would that be?
Empowering customers by delivering them choice and convenience in purchasing travel in India. This has been our core promise to customers – when we started with offering air-tickets only, and today, when we offer all travel-related services including Holiday-packages, Hotel-reservations, Cruises, Train, Bus and car-rentals. Of course none of this would have been possible without the perseverance and determination of the Trippers family.
Where do you wish to take MakeMyTrip in the next five years? What is your vision for the company?
We are already the largest travel company in the country and the largest eCommerce business, recognized for providing the best value-based offerings. In the mid to long-term, we intend to use our core strength of Technology to innovate with products and provide best-in-class service and be recognized for creating customer delight. We want to be the consultant that customers turn to for all their travel-related needs.
In the coming years, our efforts will also be focused on growing the share of the hotels and packages business in our overall revenue mix.
How aggressively are you planning to expand your market share? Are you exploring other avenues apart from the segments you are already serving?
We are the dominant market-leader with 47% market-share (as per an independent study conducted by PhocusWright in 2013). Our bigger goal is to bring more customers online — flight-ticketing business is well-penetrated but the scope of growth for online players in the Hotels and Holidays segment is immense.
What is the best marketing move that you’ve initiated which sets you apart from your competitors?
As a company, we have always laid heavy focus on alliances and promotions that appeal to our TG. We make judicious use of offline channels (TV, radio, print) to create visibility for the brand and promote specific lines of business such as International and Domestic Holidays.
We pioneered the Money-Back concept to back our Lowest-Price Guarantee and promoted it heavily in the early days. This helped build trust and credibility with customers. We extended this to other product-lines such as Hotels as well. Also, the decision to invest in a Brand TVC to build brand-association with Holidays helped build brand-awareness and affinity in the Holidays category.
What challenges have you faced while building MakeMyTrip, both professionally and personally? And what has been the single best takeaway/learning for you in this journey?
As a direct result of the dot-com meltdown, our investor eVentures withdrew from all their investments in the country, including MakeMyTrip. Saddled with a young business still in the red, the choice was to either wind down the company and go back to the corporate world or somehow muster further investment behind a potentially viable business. At this point, I decided to back my instinct and invested all my personal savings in the business. Post the dot com crash and 9/11 (in 2001) I had a really tough time trying to raise money all the way till 2005. So I took money from angel investors, right-sized the business and focused on turning profitable at the soonest, hence obviating the need for further capital. This helped us run a tight ship. Working on a boot-strapped model for the next 18 months, the company turned profitable in 2003.
Upon launching the first version of the site in October 2000, we received a favourable response from the NRI market in the US. In India however, travellers were more inclined to research online but make the actual buying decision using traditional modes of payment. We had to take a hard call to stop all marketing in India; on hindsight this turned out to be one of the best decisions for the company. By focusing solely on the NRI market, we managed to conserve precious marketing dollars while our competitors burnt their fingers in a pre-mature online market.
The tightening of marketing spend (and other related expenses) was timely and also helped us tide over one of the most difficult periods for the online travel industry. During the years 2001 & 02 travel and tourism was ravaged by a series of storms – the aftermath of 9/11; the dot-com bust; the attack on Indian Parliament in December 2001 and the SARS epidemic. While the demand for ‘discretionary’ travel and tourism plummeted, the NRI market proved to be highly inelastic and reliable, mainly because the drivers for these trips were quite different. Having empowered NRIs with unmatched convenience of a 24 X 7 online travel portal and travel consultancy support, we managed to survive through these difficult years and soon became a well-known brand among NRIs in the US.
How do you deal with competition both internal and external, like consumer loyalty, sustaining a team, hiring right, emergence of new players in the market and other external factors?
The competitors that we have today are other travel portals, but our competitive landscape may change in the future. Disruption is the norm of business so one cannot predict whether a new Technology or a new way of doing business will create a future challenge. The edge is creating customer loyalty through great products and services, and continuing to innovate through technology.
How does it feel to be ranked among the top 5 great places to work?
Creating a company that offers an engaging and rewarding work-environment is my biggest source of professional pride.
Do you think attracting talent became easier after the IPO?
I wouldn’t like to think so! MakeMyTrip’s success is a result of the contributions of our talented and skilled employees who helped take the Company to IPO. They had the zeal to succeed and beat the odds. Post the IPO, we have continued to attract among the best talent in the industry while retaining our valued employees.
What measures do you take to promote and develop work culture in your organization?
MakeMyTrip has an entrepreneurial work-culture, allowing employees the freedom to take risks and own decisions. We focus on ensuring that employees really look forward to their work-day. We’ve incorporated a bunch of values to make it happen, one of them being “Fun @Work”. You can’t expect your employees to service with a smile unless they have something to smile about. And the intentional use of fun and play on the job is the best way to create an enthusiastic and committed workforce. An atmosphere of fun at work in any organization facilitates flexibility, change and better communication. Salad-making competitions, theme-dressing on Fun Fridays, group Yoga sessions partly-funded by the office, or TT competitions that are keenly contested and followed – these are a few of the many activities as a part of Fun@Work.
Employee Development is another big focus area for us. We invest in GROW – a learning and training curriculum expertly crafted to develop people. GROW is a network of activities which develops a Tripper for their current job, their future role, and enhances their competencies as a potential leader. Our largest investment after acquisitions and marketing is in GROW.
What has been your single biggest challenge in sourcing and retaining talent?
Our work-culture is a strong retaining factor. Even in our exit surveys, employees usually say if they were given an opportunity they would like to rejoin MakeMyTrip. The eCommerce industry in India is coming of age, and as such there is a talent crunch that all players face. Furthermore, we look for a unique combination requiring the mindset of a Technology-oriented person but with the people-skills and savvy required in the Travel & Tourism industry.
How do you see the Indian Internet business shaping up in 2014? Can we see the emergence of new niche players or will this year be one of consolidation?
Personalization will be a big part of e-commerce moving forward as guest expectations for more personal experiences are on the rise. Personalization will play in key role in all forms of travel whether business, leisure or activity oriented. The goal is to provide travel experiences and services that have a lifestyle appeal, not just specific functional benefits. At MakeMyTrip our focus for the next few years is the solid foundation for personalization. For example: from a CRM stand-point, we send targeted mailers and offers basis customer purchase patterns and behavior to drive better conversions and personalize our interactions with customers.
Mobile travel technology will be the other big play-field. There is also an emerging need to create Public-Private partnerships in the travel space to ensure better services and products for the traveller. We recently partnered with various Governments to bring their State Road Transport Corporation (RTC) inventory onto the MakeMyTrip mobile application.
What would be your piece of advice for new players entering the e-commerce sector in India?
New entrants should choose their business models and industry carefully. Get into industries with a lot of scope for growth and plan your fund-raising right. In current environment always keep a buffer of cash or line of credit you can dip into when times are tough. Also, get the team right. It’s the single most important determinant for success and everything else can and will change!
How had been your life prior to MakeMyTrip?
I took a job with ABN Amro Bank right out of B-school. It was a fairly easy and obvious choice to follow a structured career path and I was quite excited about my first job. I have fond memories of the tenure where I made friends for life and found very good mentors. But after 3 years, I was vaguely dissatisfied with the pace of work and I knew I wanted to explore something more challenging and adventurous. I joined AMF bowling – which was a near-entrepreneurial set-up. I stuck with it for a few years but the market-timing was not right, and I learned a lot about doing business in India. After this, I moved to GE Capital in business development. It was here that I explored the potential of the Internet as a distribution channel. Around this time I was also thinking about my entrepreneurial aspirations and was already interested in a couple of sectors including travel and online stock-broking. Having observed the growth and evolution of the internet in other markets, I gauged that the India opportunity was just about to get realized. The travel industry – being a service industry with well-automated processes at the supplier-end and undergoing significant changes at the consumer level – lent itself seamlessly to the Internet. Being a travel bug myself this choice was closer to my heart. The sector had tremendous potential – a vast gap in the delivery standards of service levels for the average consumer left much to be desired. Thus, I quit my job to set up Makemytrip.com.
Tell us a little more about your personal journey. Did you always want to be an entrepreneur?
I have always had entrepreneurial ambitions so giving up the relative stability of my job was actually not a big deal. I think what made the decision easier was the fact that I was convinced that this was the right time to try my hand at entrepreneurship and that after this it would only become more difficult to take the plunge. It is much easier to do things at an early stage of your life. I think you can do a lot of things when you are 30 that you can’t dare do 10 years later.
Do you think MBA is mandatory to do well as an entrepreneur? How has your education at IIM helped you so far?
More than professional education I think it is important to have professional work-experience under your belt before you start something of your own. Working in professional set-ups provides you with the learnings required to work with and manage large teams and this experience serves you well when you set up an entrepreneurial business.
Any finally, any regrets?
Deep Kalra is the Founder and Group CEO of MakeMyTrip. Deep steered MakeMyTrip as CEO since its inception in 2000, to a successful listing on NASDAQ in August 2010. He took on the role of Group CEO in August 2013, to focus on Strategy, M&A and international businesses. He continues to lead the Group’s strategic developments and overall execution excellence. Deep has been serving as the President of The Indus Entrepreneurs, Delhi Board since January 2013. He served on the NASSCOM Executive Council from 2010-2013 and is presently involved with their Gurgaon Regional Council. He is also an active Angel Investor in the Internet space. He is a founding member of “I am Gurgaon” – an NGO focused on improving the quality of life in Gurgaon. He is also closely involved with Udayan Care and GiveIndia. Deep has been recognized by Ernst & Young as Entrepreneur of the Year – Business Transformation (2011), as the most powerful Digital influencer in India (2012) by KPMG and ‘Internet Man of the Year’ (2010) by IAMAI. TTG Asia awarded him Best Travel Entrepreneur of 2012 at the TTG Travel Awards. Deep was also felicitated as a ‘Distinguished Alumni’ of IIM-A during the Institute’s Golden Jubilee celebrations in December 2011.
Prior to his entrepreneurial venture with MakeMyTrip, Deep has had corporate stints with GE Capital, AMF Bowling Inc. and ABN AMRO Bank. He holds an MBA (PGDM) degree from IIM, Ahmedabad and a Bachelor’s degree in Economics from St. Stephen’s College, Delhi. His interests include swimming, yoga, quizzing, adventure sports and of course, travelling.
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