What is the aim of any company or Startup in the market? End profit right?
MakeMyTrip is a prominent name in Indian online travel business but their financial report shows that they are slowly losing their dominance on market. At least the numbers speak so! It was only last year that they have acquired Ibibo and RedBus and it was instantly one of the biggest acquisition in online travel space ever. They also raised $330 million funds in March this year.
According to Nomura Research, their expenditure in sales and promotion were much more than their net revenue! Their marketing and sales promotion expenses rose to $142.3 million, higher than its net revenues of $141.2 million. That is a huge difference! The net revenue was calculated deducting costs related procuring airline tickets, hotel rooms, and other products. In total, they lost almost $52.1 million in the quarter.
Nomura analysts said,
“Currently, competition is largely from much smaller and less funded competition such as Cleartrip/Yatra and Paytm in air ticketing. We expect Paytm to relaunch its hotel booking offering and replicate the aggression shown in air ticketing on cash back/promotions. (Besides), it is well capitalized to disrupt the market in the near-term.”
If we look into the market the number of competitors for the firm have increased. Paytm, the Indian Digital wallet platform now enjoys millions of trusted customer base. They have introduced booking online tickets and hotel rooms that were an instant hit! Their recent joining hands with Softbank let them earn a funding of nearly $1.4 billion.
Ibibo too is to be blamed. According to Nomura analysts, Ibibo has spent 1.25 times what MakeMyTrip did on marketing and sales promotion last year.
The company said,
“significant customer inducement and acquisition programs expenses incurred to accelerate growth in the stand-alone hotel booking business and increases in brand advertisement expenses”.
We will have to look forward to knowing what actually MakeMyTrip does to come back in the market stronger in the next fisal year and what more inventions they have to offer!
