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Richa Maheshwari, The Economic Times\n<\/i><\/p>\n
Richa Maheshwari, The Economic Times
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Bengaluru, 15 April 2016<\/i><\/p>\n
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Paytm\nplans an aggressive expansion of its online travel business by\nbranching out into rail, road, airline and tour bookings in order to\ndrive more traffic to its portal that is largely payments driven.
The\ncompany has partnered services marketplace Ezeego1 for hotels and\nflight bookings and is also in talks with several airlines. The online\nplayer is also integrating the rail inventory of Indian Railway\nCatering and Tourism Corporation on its platform.
“It is\nbecoming increasingly challenging for vertical players to drive\ntraffic. Whereas, horizontal players like Paytm have been fairly\nsuccessful in driving loads of it,” said Abhishek Rajan, head of travel\nmarketplace, Paytm. The company is planning to invest around Rs 120\ncrore on its travel marketplace in the current financial year.
A\nhorizontal player in the ecommerce space offers multiple shopping\ncategories such as books, apparel, appliances and more on a single\nplatform whereas, a vertical player specialises in one kind of\noffering.
Paytm will earn a commission for each booking made\nthrough its platform. The company launched its travel marketplace last\nyear and has restricted to book buses and hotels. It aims to roll out\nadventure tours, inter-city cabs and overseas travel requirements such\nas visa application and money conversion by the end of this year.
As\nper a recent Morgan Stanley report, categories like payments, travel\nand taxis saw an increase in total fundraising from 12% in 2014 to 44%\nin 2015.
Last month, rival Snapdeal had integrated bus,\nflights and food delivery bookings on the platform to drive up its\ngross merchandise value. “Horizontals are looking at monetising their\nuser base with a focus on GMV and repeat use cases. As the funding\nenvironment becomes tougher, growth in these metrics will stand out,”\nsaid an investor in of the top three ecommerce companies.
Paytm,\nhowever, is building a marketplace taking a cue from Alitrip, the\ntravel marketplace run by its investor Alibaba in China. “Our intention\nis to continuously add new travel categories to the platform and drive\norganic growth without making large marketing investments,” added\nRajan.
According to experts,\nthe strategy can ring in higher margins, too. “These services won’t\ntake up any extra cost in terms of physical space and there is no\ndelivery cost too. Hence, these players will make better margin out of\nit while providing something new to consumers,” said Devangshu Dutta,\nCEO at retail consultancy firm Third Eyesight. <\/span>
A\nreport from the Internet and Mobile Association says that the total\nvalue of digital commerce stood at Rs 81,525 crore in 2014, of which Rs\n50,050 crore, or over 60%, was accounted for by the online travel\nsegment.
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