Flipkart announced on Thursday that it might buy Cleartrip, a web travel aggregator, in its entirety. Though the financial details of the deal weren’t disclosed, sources said the travel company was valued at about $40 million. Cleartrip, on the opposite hand, will still function as a separate brand and retain all of its staff following the sale.
Cleartrip’s addition may be a move toward market diversification for Flipkart consistent with Arpit Mathur, a partner at Kearney, “it will open up new avenues of monetization for the business.”
Flipkart also will gain access to a market of 80-100 million customers who use online platforms buy ” to shop for services like hotel reservations and airline tickets but don’t necessarily shop for items on e-commerce sites like Flipkart and Amazon.
Around 250 million of India’s estimated 500-600 million internet users buy services online, but only about 150 million buy goods. “With the acquisition, Flipkart is going to be ready to turn service buyers into product buyers more easily,” Mathur said.
Flipkart, a Walmart-led company that competes in India with Amazon and Reliance, is doubling down on the region, which it considers one among its major growth markets. The pandemic-driven digital movement has boosted demand for e-commerce services, and well-heeled companies just like the Tata Group are jumping in to require advantage of the chance. Walmart’s president and CEO, Doug McMillion, previously stated that India may be a market where the corporate will “jump on the gas” to make sure adequate investment levels in key areas.
In the domestic online travel domain, Cleartrip has trailed MakeMyTrip in terms of market share. consistent with Madhur Singhal, managing partner and CEO of Praxis Global Alliance, the firm’s West Asian business has been more profitable than the Indian business. Despite its success within the aviation space, Cleartrip’s expansion into other areas like hotels, cabs, and vacation packages has been slow thanks to stiff competition from MakeMyTrip.
The business, which counts DAG Ventures and Gund Investment Corporation among its investors, is assumed to possess raised $75 million in total.
“Cleartrip is synonymous with travel for several customers, and this investment will help strengthen our broad range of products for patrons as we diversify and look for new areas of growth,” said Kalyan Krishnamurthy, CEO of Flipkart Group.