Cleartrip is completing over a decade in the online travel space and has taken great leaps as a steadily growing business and brand name. Guardian 20 speaks to Subramanya Sharma, Chief Marketing Officer and Head of Products, Cleartrip, about the company’s plans for future growth and becoming a global market leader when it comes to travel solutions.

Q. What was the main aim or idea behind building a platform like Cleartrip?

A. People love to travel, but the multiple touchpoints associated with it (airports, hotels, pricing, booking experience, planning) can lead to uncertainty and anxiety. We wanted to make travel simple, with a fanatical view on solving customer pain points in travel. 

Q. What is the dream that you, as a company, are chasing with Cleartrip?

A. We want to build an everlasting brand that stands for customers. A brand that is relentless in innovation and known for solving the customer needs, every day.

Q. What would you say is Cleartrip’s brand philosophy?

A. We firmly believe that companies need to create value for all its stakeholders in the ecosystem—customers, employees and investors. The only way to create sustainability for the company is to create differentiation and value for its stakeholders. Competitive pricing is a given in any market, but indiscriminate discounting creates temporary distortion in the market dynamics. It is the companies which don’t get distracted by this chaos and focus on creating customer differentiation that will succeed in the long term. Our founding philosophy is our guiding light to make sure that we stay true to the course, and continue in our path of customer-centric innovation.

Q. What makes Cleartrip different from other online travel platforms?

A. Product and profitability are the two key pillars which complement each other, and we think that fundamentally differentiates us from the rest.  

Q. What is the market strategy of Cleartrip for the long term?

A. We believe that the problem statements in travel are probably just 25% solved. Also, each of the markets that we operate in is growing at over 50%.This combination gives us enough space to solve for the long term. From a market standpoint, India and the Middle East markets offer significant, yet different opportunities, and that will keep us busy for quite some time.

Q. What kind of strategies are you implementing to reach out to new customers?

A. For us, the product is the brand and the main marketing channel. The paid marketing strategy complements the product by inducing trial, and we are confident of the product giving us conversion and retention. In terms of tactics, it is a combination of product strategy (which gives us the word of mouth), and highly optimised online performance marketing to get us new customers. 

Q. How difficult is it to survive in this highly competitive travel space?

A. As long as the fundamentals are sound, and you keep evolving in terms of your response to customer needs, you don’t have to worry about survival. But without that, it is extremely hard for a “me-too player” to exist in the long term. 

Q. Cleartrip was the first to launch an online train bookings feature,  which was followed by the government portals of IRCTC. How did that impact the business? Also, do you feel that the reach of flights, in terms of bookings made online, has surpassed that of the trains?

A. Trains definitely bring a wider reach with customers than flights. But, the margins are pretty much in the flights business when compared to the trains business. For us, there are two reasons that trains are important. One, that trains are a big part of travel in India; and two, that the cross-sell to the revenue generating parts of the business is significant. 

Q. After the last round of funding in 2016, worth $75 million, Cleartrip is yet to announce the next round. Could you throw some light on that?

A. As I said before, profitability and efficiency form one of the key foundational pillars for us. As of now, we are sufficiently capitalised to take care of our destiny. 

Q. What has been the biggest challenge for Cleartrip in the Indian market?

A. India has been through multiple market catalyses and so on. Mobile evolution, air traffic growth, demand for tier-2/tier-3 cities, and so on. This has required us to constantly make sure that we are ahead of the demand, and on top of customer needs and aspirations. The product evolution has been challenging and at the same time gratifying.

Q. Unlike other online travel agencies, Cleartrip has a separate platform to cater to the hyperlocal market. Give us an insight into Cleartrip Local.

A. Travel is a need-based business, and the frequency of travel in India is still in its infancy (2-3 trips a year, as compared to 12-15 trips globally). We wanted to create a product which has the same target segment as travel, but the opportunity to use is much higher than travel from a frequency standpoint. As we thought about this opportunity of having to trip without travel, the Local business was born. It acts as a good source of new customer acquisition. 75% of local customers are new, and also a good 20% cross-sell to travel in a six month period. The customer demographic is 10 years younger (25 for local versus 35 for travel on average) and less skewed towards male customers as compared to travel. In addition, the stickiness of people who travel and then use local is almost 25% better than the rest. Therefore, on both sides of the cross-sell, it seems to be working well for us. 

Q. How are offline markets profitable to the online travel space?

A. The main difference is the short-term acquisition costs, which when apportioned to the life time of the customer will create huge value for the future. 

Q. The historic tax amendment of GST has revolutionised the industrial sector. Has this been profitable for online travel businesses?

A. GST has been a mixed bag, to say the least. While air travel faces the brighter side, the hotels in the higher segment get an overall cost increase. Backed with the broader aviation strategy of promoting regional travel, we believe the GST helps usher in a brighter era in Indian domestic aviation but might not give a similar push to the overall tourism industry with the impact it has on the hotels space.


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