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Cleartrip to stay away from offline strategy

Says open to IPO, will not get into new verticals such as holiday packages

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Travel portal is clearly going against the industry trend of online-offline hybrid strategies.

“There is no need for another or a Cox & Kings. The offline market is saturated,” said Co-founder Hrush Bhatt. Also, the hybrid strategy was “not easy, not cheap and not viable”, he added.

Cleartrip claims it has a share of 30 per cent in the online travel market, second only to MakeMyTrip, which has a market share of 35 per cent. To keep its net earnings intact, the company aims to maintain a small team.

  No. of employees Market share Net profit
(Q1 of FY13)
MakeMy Trip* 1,000-1,200 35 $1.8 mn
Cleartrip 450 30 NA
Yatra 800-900 30 NA
* Listed on the Nasdaq                                                              Source: Industry

Bhatt says the company’s profits grew 80 per cent in the last six years, since it started operations in 2006. Cleartrip’s employee strength of 450 is nearly half that of (800) and much below MakeMyTrip’s 1,200.

“If you look at the number of businesses we both (Cleartrip and MakeMyTrip) are in, the headroom for Cleartrip is tremendous. We have not even entered half the business they are in,” Bhatt said.

Unlike its closest competitors, Cleartrip has not organised too many ad campaigns. While the company has recently hired an advertising agency and would ramp up marketing, it does not wish to expand into new verticals such as holiday packages.

“Traditionally, we have raised much less money than our competitors. We have burnt much less. It is part of our DNA.…Cleartrip is a very quality-conscious company. Marketing is number three on our agenda,” Bhatt said.

What is the first? Bhatt says it is improving customer experience with better products. For an online travel company, that means technology enhancement. In fact, this is one area in which Cleartrip would like to opt for acquisitions.

Like its peers, the company has public listing in mind. Asked about his plans for an initial public offering (IPO), Bhatt’s response is, “We’ll do whatever is best for our customers, our company and our shareholders — in that order. If an IPO fits with that, we’ll think about it.”

Recently, Cleartrip opened a regional office in Dubai. The company has also expanded into the West Asian market. Though further international expansion plans are yet to be decided, it sees opportunity in a “lot of underserved markets in the West and in the entire southern hemisphere”.

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