Travel portals have started to tie-up with online shopping portals and offline retail outlets to jointly promote their value-added offers as shopping portals gather huge traffic around festival time. They reason it will help them tide over the current lean phase in the economy.
Yatra has entered into strategic partnerships with Futurebazaar.com, Mobilenxt.com, Ferns N Petals, Storeguru.com and Indiaplaza.in to give special offers on mobile phones, flowers, jewellery, gadgets or even pizzas, offering discounts of up to Rs 15,000. Mudit Khosla, head, strategic alliances, Yatra, says: "Our conversion figures have risen by 15-18 per cent through such tie-ups."
Cleartrip, too sees strength in doing a joint promotion. "We have executed the same with online portals like BookMyshow and Indiaplaza, Futurebazaar, Zoomin, Bigflix, Rediffshopping, wherein we have offered customers a fixed freebie if they fulfill the offer criteria. This has been accepted very well by our customers. It has also benefited our alliance partners to have premium and internet savvy customers who shop online buy from their respective websites," says Noel Swain, vice-president, marketing, Cleartrip.
Others are about to announce such tie-ups soon. Vikas Gulati, vice-president, APAC, Sprice, says his company is in the advanced stages of closing deals with a few leading shopping portals, and he expects 30-35 per cent of its business via these online tie ups. Deep Kalra, CEO & founder, MakeMyTrip, says: "We have entered into tie-ups with banks as preferred partners to pass on benefits to customers (HDFC Winter offer, HSBC Credit Card offer, ABN Amro voucher)."
Many travel portals have tie-ups with offline retailers too or have already set up own kiosks, and others are planning it soon to expand their business. Makemytrip has kiosks in various retail outlets like Spencer's and Subhiksha stores in 23 cities. Cleartrip has kiosks in some Big Bazaar outlets. Yatra has set up Holiday Lounges in 10 cities, apart from setting up travel desks in Reliance World, Hughes' NetFusion and Sify iWays. Travelguru also has retail stores called Travelguru Holidays. Ezeego1 has started a retail outlet in Mumbai.
One apparent reason is to make up for the low reach of Internet in India. Moreover, the majority business is offline because of limited adoption of e-commerce, the existence of a cash economy and loyalty to offline travel agents. And in view of economic slowdown and soaring air fares, it becomes imperative to work on an online and offline mix.
Currently, only 11 per cent of the total travel market size comes from online channel. The online travel market is expected to grow by a whopping 61 per cent (from $1,750 million in 2007 to $2,823 million in 2008). The total travel market is pegged at $70 billion.
Hari V Krishnan, vice-president, product & marketing, Travelguru, says: "Few of the offline tie-ups are Westside, McDonalds and many more. Such offline tie-ups render further value to the company and target new and traditional customer. It negates the perceived superficial aspect of an online travel portal."
The offline distribution adds considerable revenue for the portals. Yatra typically garners 10-15 per cent of its overall turnover through such offline channels. Incidentally, despite the economic slowdown and soaring air fares, the industry expects double-digit growth, but not as strong as last year. Krishnan says the economic slowdown and the ATF hike does affect tourism to an extent. "There is a definitely a dip in the business of about 3-4 per cent but the industry hopes to escalate in the season," he admits.
