Flipkart announced on Thursday, that it
is acquiring online travel aggregator Cleartrip, for an undisclosed amount. The
agreement would enable the Walmart-owned e-commerce behemoth to expand its
online travel space footprint, and become a more formidable competitor to
Amazon. Even though both, Flipkart and Amazon provide flight, bus, and train
bookings, companies such as MakeMyTrip and Cleartrip have been key players in
this space. This acquisition will also aid the company's business and revenue
growth.
According to the terms of the agreement,
Flipkart will acquire all Cleartrip operations, while Cleartrip will continue
to operate as a separate brand. The agreement also specifies that Flipkart will
acquire 100 % of Cleartrip's shareholding, following the completion of the
transaction. Cleartrip's workforce will be retained.
“We welcome the Cleartrip team to the
Flipkart Group with their deep industry expertise and technology capabilities,
and we look forward to working together to provide deeper value and travel
experiences for customers,” said Kalyan Krishnamurthy, CEO of the Flipkart
Group, in a prepared statement. The acquisition's financial terms were not made
public. However, the contract is said to be worth about $40 million (roughly
Rs. 299.8 crores).
Flipkart collaborated with MakeMyTrip in
2018 to create travel bookings on its website. Later, in August 2019, Flipkart
agreed to a partnership with Gurugram-based Ixigo. Since then, the travel
industry has faced an uphill battle, with more than a year of COVID-related
restrictions, having a significant effect on travel.
“We are thrilled to be joining the
Flipkart family and are excited about the positive effect this partnership will
have on our customers and the travel industry in general,” said Stuart
Crighton, CEO and co-founder of Cleartrip.
Cleartrip, founded in 2006, was one of
the first major travel aggregators, though third-party data show that rivals
such as MakeMyTrip and Ibibo, which merged in 2017, became even more popular
over the years. Cleartrip introduced Alexa integration in 2018 to enable users
to book flights and hotels using voice. In May 2019, the Mumbai-based company
also collaborated with Flipkart's arch-rival Amazon to add flight bookings to
Amazon Pay.
Amazon and Flipkart both refused to
comment on whether the Cleartrip offering for Amazon Pay will be maintained.
With the addition of Cleartrip, Flipkart enters the travel aggregator market,
which already includes EaseMyTrip, Goibibo, MakeMyTrip, and Yatra, among
others. The agreement also comes at a time when people are avoiding travel due
to the spread of the coronavirus.
According to the India Brand Equity
Foundation (IBEF), India's travel and tourism sector will expand 6.7 % to Rs.
35, 00,000 crores by 2029, accounting for 9.2 % of the total economy. The
country also has many platforms that allow for online booking and preparation
for domestic and international travel.