Flipkart on Thursday stated it will wholly obtain on line travel aggregator Cleartrip. Though it did not disclose the economic facts of the transaction, sources stated that the travel firm has been valued at about $40 million. Post the transaction, Cleartrip will, nonetheless, continue to operate as a separate brand and retain all its workers.
For Flipkart, the addition of Cleartrip is a step towards company diversification. It will open up new avenues of monetisation for the business, stated Arpit Mathur, companion at Kearney.
Also, Flipkart will get access to a share of some 80-one hundred million shoppers who use on line platforms to acquire services like hotel reservations, air tickets but do not necessarily shop for merchandise on e-commerce internet sites like Flipkart and Amazon.
Of the estimated 500-600 million Indian information customers, about 250 million shoppers obtain services on line but only about 150 million of them acquire merchandise. “With the acquisition, it will be easier for Flipkart to convert the service buyers into product buyers,” Mathur stated.
Walmart-led Flipkart that competes with Amazon and Reliance in India is doubling down on the nation which it counts as one of its significant development markets. The pandemic-led digital push has accelerated demand for e-commerce services and deep-pocketed players like the Tata Group are also getting into the fray to leverage the chance. Walmart president and CEO Doug McMillion had stated that India is a marketplace exactly where the business will “step on the gas” to guarantee it has suitable levels of investments in relevant places.
Cleartrip has trailed in marketplace share in the domestic on line travel space which is led by MakeMyTrip. The firm’s West Asian company has rather been more lucrative compared to the India company, stated Madhur Singhal, managing companion & CEO at Praxis Global Alliance.
Although Cleartrip has grown properly in the air travel space, their development in other spaces like hotels, cabs, and vacation packages has been slow amid stiff competitors from MakeMyTrip. “The deal with Flipkart is beneficial for them as they will get access to funds and captive customers from Flipkart and PhonePe network; this would provide the necessary impetus for growth and profitability for Cleartrip in the Indian market,” added Singhal.
The firm that counts DAG Ventures and Gund Investment Corporation amongst its investors is understood to have raised about $75 million in total funding.
“Cleartrip is synonymous with travel for many customers, and as we diversify and look at new areas of growth, this investment will help strengthen our wide range of offerings for customers,” stated Kalyan Krishnamurthy, CEO at Flipkart Group.