At the last WiT Middle East in Dubai in 2015, Stuart Crighton, CEO of Cleartrip, made it very clear the OTA would bet big on mobile given the high mobile penetration in the region, a trend markedly similar to its home market in India.
Articulating his vision then, he said Cleartrip did not wish to be known as an Indian OTA since even, at that time, only 40% of its business was in India, and that Middle East was clearly in its sights.
In 2018, it acquired Saudi Arabian startup Flyin and since then, Crighton said business has doubled and Cleartrip has cemented its position as the number one OTA in the market.
Ahead of WiT Middle East 2019, at which he will be speaking again, he said,“The acquisition has been very successful on all fronts. We have achieved this with razor sharp planning and ensured seamless integration for business, people and resources. The results are clearly visible and we have now doubled our Middle East business and cemented our #1 market position in the region.
“The acquisition has helped us open up new markets like KSA, Egypt and demographics and penetration with Arabic speaking customers. The outcome is extremely encouraging and has resulted in helping us realize significant revenue and cost synergies in a very short period.”
As he sets out to build Cleartrip as “the OTA to the emerging world”, he is bullish about the future of the region which is seeing a rapid transformation in customer buying behavior. Here’s why.
Q: Can you give us an update on Cleartrip and its intentions for the Middle East market?
Middle East market is a very important market for Cleartrip and we will continue to invest and expand both organically and inorganically. We have chalked our clear strategies and execution plan for entering new countries and introducing newer products such as hotels & packages, experiences and visa services. We will also actively explore newer channels in both B2C and B2B space.
Q: What are its top priorities in the region currently?
We have witnessed great support from our customers and hence we will continue to invest and create a strong brand awareness to further amplify the brand strengths. We will deploy resources and focus on growing online penetration in the region especially KSA, Kuwait and the UAE. We have a solid road map planned this year to introduce innovative products and features using the latest technologies to provide best in class experience to customers.
Q: What are the three most exciting trends taking place in the Middle East online travel space? And how does Cleartrip hope to ride on these trends?
Middle East online travel is getting exciting and we are witnessing growth of LCC carriers and online adoption by consumers thus creating a huge opportunity for us to maximize our share by offering comprehensive content and intuitive booking experience.
The region is undergoing a shift to mobile from desktop for search and book and we have already launched our best in class Mobile APP and PWA site to offer superior experience for our consumers.
The payments ecosystem is rapidly improving and thus making online/mobile payments easier and safe. We are investing extensively in each of these areas, and bringing in our learnings from operating in other markets where these trends are more evolved.
Q: Your expertise is in India – does it make you better equipped to face the peculiarities of the Middle East market? What similarities/differences are there?
We would like to believe that our expertise is across emerging markets. We have been present in the Middle East and India for a decade now. These markets have a lot of similarities. Both are large markets with young populations looking for affordable travel solutions. Both markets are witnessing a transformative shift in buying behaviour from offline to online channels. Growth in both markets are driven by low cost carriers.
Both regions are witnessing a rapid development in payments infrastructure that is also aiding the shift in offline to online. Our learnings in product evolution, marketing, customer experience are replicable across all markets and we have been able to exploit this to drive leadership.
Having said that there are differences in terms of diverse nationalities, languages, cultural settings, payment ecosystems, mix of inbound versus domestic tourists to name a few. These however also provide us exciting opportunities to build offerings that cater to local needs while bringing best in class product experience for our customers.
Q: We see local players expanding – in January this year, Al-Tayyar acquired the remaining 40% stake in Almosafer for US$18.66 million (70 million Saudi Riyal). Do you expect to see this trend continuing – that of traditional incumbents reinventing themselves and investing in the digital travel space?
Very few traditional players, not just in Middle East but globally, have been successful in this transformation, as digital businesses require different mindsets and capabilities to build. Al Tayyar has tasted success because of their approach of incubating and acquiring Almosafer at an early stage and also committing levels of significant investments. As digital travel continues to scale, it is inevitable that we will see competition from other players but few will be successful as stronger players are well entrenched with high growth rates and strong appetite for further investments.
Q: More and more, we are seeing hybrid models – online to offline models, and offline to online models. What’s your take on this trend – is it particularly suited to the Middle East market?
Across the globe businesses tend to converge towards omni-channels to be able to satisfy the requirements of different sets of customers. We try and cater to this need by taking a customer centric and channel agnostic view to building our products. Ultimately we will do what we believe is best for our customers, suppliers, partners and investors.
Q: Global brands have also entered the Middle East – Booking.com, Expedia, Agoda – and are having some success. How do brands such as yours, that do not have global scale, compete?
We see Cleartrip as the OTA to the emerging world, which in the near term for us means Middle East, Africa and South Asia. Emerging world customers have unique tastes, preferences and requirements. Cleartrip is uniquely positioned to serve customer needs in this part of the world in a way other global players are not.
For example, in the Middle East, we have adapted to local needs by developing an Arabic site and customer service operations. We have also solved for a host of ancillaries such as extra baggage. On the supplier side we have focused on regional content through direct integrations and local contracting. We have also integrated with the larger ecosystem in these markets by partnering with local banks and payment providers.
This holistic approach of engaging deeply with customers, suppliers and partners enables us to be embedded deeply in these markets and provides us a strong platform for leadership in these markets.
Q: What can global do better than you?
Global companies by their sheer size can use capital as a differentiator. They can use their deeper pockets to outbid us on marketing. They would also be able to provide better rates for outbound travellers to markets where they dominate. Lastly they can bring innovation from developed markets quicker into our markets.
Q: What can you do better than global?
We are probably one of the most capital efficient operators in our industry and are able to better allocate our resources to drive desired business outcomes while making travel simple for customers in our target markets. We are extremely agile in customizing our approach to a market based on local market needs. In every market we operate we have been able to customize our products to suit local customer needs while also developing deep partnerships with suppliers and partners. This in turn has helped us build strong customer loyalty and a high degree of brand recognition.
Q: Cite three major opportunities in the Middle East travel market that make it so exciting
The Middle East is in the midst of rapid transformation in buying behavior. Customers are increasingly shifting from offline to online channels for their travel needs. This shift has been massive with the online travel industry growing significantly faster than the underlying travel market in the Middle East. This shift has been the most for flight bookings and we now expect this trend to continue into other travel products such as hotels, packages and activities.
We are confident of replicating our success in flights in these areas too. The third opportunity that we are excited about is consumerization of corporate travel. We expect the lines between business and leisure travellers to blur with business travel needs increasingly aligning with those of leisure travellers. This provides us a massive opportunity for brands like us that are at the forefront of innovation.
Q: Are you planning more acquisitions? What areas are you interested in? Tours and activities? Alternative accommodation?
Acquisitions are an integral part of our strategy and complement our already strong organic growth
trajectory. We will continue to be opportunistic and disciplined in our approach to M&A. Our areas of interests are opportunities that provide us access to new markets, new products, technology and talent.
