India, Indonesia – lands of opportunities for online travel
24/10/2011 by WiT

Two countries, so similar yet so different – one maturing, yet still seeing explosive growth, the other emerging and about to see explosive growth.

Indonesia may not have strong online travel brands but awareness is growing, said Danny Oei Wirianto, CEO of Mindtalk, Indonesia (pictured left). The presence of AirAsia in Indonesia is doing a good job in educating the public of using online to book tickets and make payment.

“We’ll see what happens next year,” said Wirianto who’s just started Mindtalk, a new social network which he hopes to take global.

For India, where the online travel space is flourishing and three big local OTAs are dominating, it is not game over yet but just early days as there is a huge market waiting to be tapped.

“Currently there is only 8.9% Internet penetration in India, 500 million in middle class that is still growing and the country is a consumer market. So I’d say the Indian online travel market is still in its early days,” said Amit Saberwal, director of international market development, Makemytrip, India (pictured right).

In agreement is Rajeev Kumar, CEO + managing director, Mystifly Consulting, India (pictured below) who disclosed that online penetration is growing at 8%, with rapid adoption of broadband too.

They were sharing insights into the two dynamic markets of India and Indonesia at the panel discussion at the recently concluded WIT 2011 conference in Singapore.

In response to a question by moderator Brett Henry, Abacus International’s VP marketing & VP India, on why Expedia and Travelocity had not taken off in the region as they have in the US, the panellists played the local card.

Graham Hills, general manager of Wego, Indonesia (pictured below), said that a market like Indonesia is still in a discovery phase. “What is being offered and what’s needed is local content and local product offerings. Credit cards are not going to work in Indonesia.”

Makemytrip’s Amit said that In India there’s a distribution problem as 50% of consumers stay in small towns and villages. “There is a need for local strategy to identify the distribution problem,” he said. Indeed, he added, there needs to be a different strategy for different parts of India.

Mindtalk’s Wirianto commented, “If you want to play local, you must have local partners.”

The challenge though is how to be local, yet scale and expand beyond home territory.

Hills believes that with Indonesia being such a big market, a local play is sustainable and at the moment, flight and hotel search was in its infancy in the country.

For MakeMyTrip which is attempting to expand beyond India, Amit said, “Scale is everything. It’s not negotiable at all. But you need a local strategy and do what you have to do.”

Wirianto believes that one does not scale  “unless one has conquered major markets.”

Are the two markets ready to skip the PC and go straight to mobile, as some pundits have predicted?

Hills said Indonesia could not do without the PC completely. “Maybe PC to mobile.”.

“The PC is evolving into tablet. Presently 90% of search is carried out on mobile. Mobile is going to see huge growth,” said Amit.

Rajeev said PC is here to stay as currently 85% online usage is on a PC, with 15% on mobile.

“Focus is on both the PC and mobile. We won’t skip the PC, but mobile is the way to go in the future,” said Wirianto.

Finally, the panellists offered these nugget of wisdom to do business in their markets:

• Wego’s Hills: “Localisation. Search and Social, not one or the other.”

• Mindtalk’s Wirianto: “What works outside Indonesia doesn’t mean it will work inside Indonesia.”

• Makemytrip’s Amit: “There are opportunities for start-ups. Be brave.”

• Mystifly’s Rajeev: “Focus on your first customers, then fan out.”

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