ibiboGroup, the country's leading online travel company, recently strengthened its presence in online bus ticket booking with two buyouts, of redBus.in and YourBus.com. Backed by Naspers, a South African investment firm, it owns major portals such as Goibibo.com and online marketplace Tradus. Ashish Kashyap, chief executive officer of ibiboGroup, speaks to Reghu Balakrishnan on the buyouts, growth and integration plans. Edited excerpts:
In the $3-billion bus travel segment in India, the online space is below 10 per cent. So, why the two large buyouts in a year?
Despite coming late into the market in 2010, we organically and frugally built and scaled up. The primary focus was on hotels and flights. In 2012, we partnered with redBus to launch bus ticketing on goibibo. The traction was excellent and we learnt the nuances of online bus ticketing. This resulted in the acquisition of redBus.in. We saw some key winners in redBus - market leadership 10 times the nearest competitor's size, excellent team and supply-facing platform enabling the sellers (bus operators) to manage inventories. It was these points and scale that motivated us to acquire redBus. The combined transaction volumes of goibibo and redBus made us the most scaled online travel player in the country.
About the YourBus.com acquisition.
The core rationale is to further enhance the buyer experience on our online travel properties, both redBus.in and goibibo.com. The YourBus platform not only solves significant passenger-pain points but also significantly differentiates our consumer-facing online travel properties on both mobile and desktop. Unlike redBus, YourBus is an early-stage technology innovation. Hence, it might be wrong to state this is a large buyout.
Any other areas where ibibo will consider or explore buyout opportunities?
We always remain open to opportunities and entrepreneurial teams.
How's the growth for goibibo been in the past couple of years?
Goibibo is the fastest growing OTA (online travel agency) in India, growing more than 100 per cent year-on-year. In the context of e-commerce, online travel is a very sound business model. Categories such as hotels, international flights and buses are all very exciting segments, with the common theme of supply fragmentation.
How can you tackle the increasing competition in online travel booking?
Competition is excellent and more than welcome. If we look at the hotels category, it is highly under-penetrated on the internet - less than eight per cent, versus 35 per cent for air. Competition, along with us, will drive user behaviour towards booking hotels online. At the end of the day, the platform delivering the best user experience, backed with deep technology on both the supply and demand side, wins. Our core value of delivering fastest user experience -whether in booking process, search results, payments, refunds, customer service, etc, have driven significant differentiation. Further, unlike a lot of players, we are focused on a pure play online. We have consciously stayed away from looking like Cox & Kings and Thomas Cook, which a lot of other OTAs focus hard on. They sell fixed departure packages, organise conferences, service corporates.
How do you see the entry of more airlines in India?
This will further create the much needed impetus in the domestic air category. More supply and supply fragmentation is always good for any marketplace platform.
Recently, Tradus pivoted to a mobile and location-based marketplace from an online marketplace model. Why? What impact did it make?
We believe the mobile commerce will outstrip desktop-based transactions. Mobile plus location drives huge efficiencies. We have created an ecosystem wherein we aggregate real-world retailers, backed by our logistics system, which is enabled to deliver the same day to buyers, using the location context. We believe mobile plus location is a huge differentiator for Tradus. It is already one of the top-ranked shopping apps on Android, Windows and iOs.
Will ibibo explore buying out similar e-com businesses through Tradus?
We cannot speculate at this stage. The focus is to build Tradus and drive local commerce.
How did you plan to expand Nasper's travel business under ibibo into India and other markets?
We remain open for opportunities but would not want to comment at this stage.
What's the current view of venture capital / private equity investors in India e-commerce space? Are they too cautious?
Assets that have performed are getting the backing and investors are going all out behind them. Firms that could not build & scale or with lack of differentiation, will find it hard to raise money.
How Ibibo plan to integrate all the travel businesses - redbus, Yourbus, Goibibo etc under one roof?
Yourbus is already integrated with redBus. Other than that we will continue to run our consumer web and mobile properties separately. We already integrate the supply side on each of these platforms.