Paytm Travel, the online travel booking business of payment wallet Paytm, is bracing to overtake Nasdaq-listed MakeMyTrip in online bus and flight ticket bookings in FY20. The company sold 38 million rail, bus and flight tickets in FY18 with threefold growth over FY17 and is aiming to close the current year with sale of over 70 million tickets.
“In the current financial year, we are seeing a near twofold growth rate over the high base of FY18 in online bookings. We have narrowed the gap with market leader in both online bus and flight bookings and hope to achieve a market leadership in these two segments during FY20. If we combine the numbers of our rail, bus and flight bookings, Paytm is already the second-largest online travel agency in the country,” Abhishek Rajan, vice-president (travel marketplace) at Paytm, told Business Standard.
Paytm Travel claims to have a base of around 13 million customers, a threefold increase over the user base in FY17. “In the first three quarter of FY19, we have added over 4 million customers and another million users may be added during the current quarter,” said Rajan. The customer base of Paytm Travel, while significant, is a fraction of Paytm’s wallet user base of more than 300 million.
But Rajan is confident of the prospects. “We are just scratching the surface. The wallet base shows a much bigger opportunity is waiting for us in online travel. We are trying to reach out to users in a targeted way. We are now running minimal cash back offers. There is no cash back on booking of rail tickets”, he said.
Rajan did not share the break-up between rail, bus and flight bookings. He, however, said IRCTC was the market leader in online rail ticket space and it would continue to dominate the space. In bus and flight bookings, Paytm’s competition is with the Nasdaq-listed MakeMyTrip, the country’s biggest e-travel firm. MakeMyTrip, which also owns redBus (a dedicated bus ticket booking platform), sold over 28 million tickets in H1 of FY19 (up 54 per cent YoY). It sold over 19 million flight tickets, along with ibibo, a brand it acquired in 2016.
Paytm will have to ramp up numbers over the coming quarters to overtake MakeMyTrip. Rajan said the firm was getting a strong response from customers in tier-II and tier-III cities “A lot of users in these cities transact offline. We are trying to build the trust factor to bring them online. Of our new customer acquisition, more than two-thirds share is coming from these markets”. The company said it was taking initiatives to enhance the online booking experience. Last month, it waived off all transaction charges, payment gateway and service charges on train ticket bookings made on its platform. It is also offering an instant refund for cancellations.
While there is no cash back for rail ticket booking, Paytm said it was ploughing back the margins earned on bus and flights tickets in promotions and marketing activities. “We are at a break-even point. If we stop incentives today, we can turn profitable. But our focus is to first expand the reach and then look at profitability,” he added.