Indian e-commerce giant, Flipkart has decided to extend its business and services in the domain of Online Travel Agency (OTA) by taking over the popular travel related website MakeMyTrip and Yatra.com. The online retailer is looking to diversify its service base and is now eyeing on booming online travel agency to generate some revenue and earn a substantial customer base.
With websites like Myntra and Jabong under its belt, Flipkart has performed well in Fashion and electronics category and has been able to retain its customer base through effective service delivery and customer satisfaction. Flipkart would like to replicate the same in OTA business as well.
Regaining Strength in the Market
The narrowing gap between itself and Amazon in terms of market share in Indian e-commerce domain might have set alarming bells in Flipkart and the move is also touted as one to regain its strength in the market.
Amazon’s latest collaboration with SAP and Leica camera to deliver their products on its platform in India have already led to the diversification of customer base for the global e-commerce giant. Not only this, one can avail exciting Amazon offers while making a purchase. Since Flipkart has a bleak edge over Amazon it didn’t have an option to wait long for bouncing back. Since Amazon has not yet stepped into this domain Flipkart would have an advantage of moving first in this direction.
Looking for Category Development
Flipkart’s official sources revealed that Flipkart is aiming to develop the OTA category as a part of its online business and is looking to recruit a category head for the same. The announcement of taking over MakeMyTrip and Yatra.com is expected to be made soon and the decision would be a part of Flipkart’s decision to extend its vertical into OTA domain.
There is much to gain for Flipkart in its acquiring of MakeMyTrip and Yatra.com as both the websites are renowned and established names in travel segment and would save Flipkart’s resources and energy in developing the platform for the market.
Extension of an offer as a part of services
Customers would be soon able to make their bookings of hotels, train, bus, air tickets etc. on Flipkart’s platform once the category is developed on its website and mobile/tablet app.To gain and retain customers, Flipkart is expected to extend exciting offers and deals as a part of its services in the OTA domain. OTA market with its size and revenue generation capacity would be a crucial turn over for Flipkart in its battle with Amazon if the move goes right.
Growth Expected but investments would have to be infused
Though growth in terms of Gross Market Value and customer base diversification is expected for Flipkart it would have to shell money on the acquired platforms to revitalize and accustom the segment as per its market and development strategy.
The initial investment in face of the extension of offers and deals, development of segment etc. would drive away some attention and resources of Flipkart from its main segments, however, a robust business development strategy is what that is required at the core of Flipkart’s latest move. Rest all, as they say, is wait and watch a game.