In humongous India, where snaking lines and extended waits are emblematic, instant travel reservations herald a new mobility. Deep Kalra’s MakeMyTrip web operation pioneered the online travel field and at times has felt investor and customer delight.
But this is India, remember, and for the 43-year-old Kalra, as for many a service sector startup, the flight has been a bumpy one.
Today MakeMyTrip is fighting to stay profitable in an erratic economy and nascent ecommerce ecosystem. Kalra’s paper wealth, over $50 million, has been halved in 18 months and cut by two-thirds since a post-IPO peak. In the quarter ended in December, MakeMyTrip’s net revenues declined 5.5 percent and losses mounted to $2.6 million.
Even as investors pummeled the stock back to its $14 listing price, Kalra in an interview stoically takes refuge in Bollywood-speak. “Life is QSQT … quarter se quarter tak [quarter to quarter],” he says, using the popular acronym for the iconic romance film Qayamat Se Qayamat Tak.
“We have had plenty of highs and lows,” he recounts. Certainly, the highs have been many. Today one in eight flights within India is booked on MakeMyTrip. In the last four years MakeMyTrip has quintupled revenues, reaching $66.3 million in the first three quarters of fiscal 2013. Profits hit $9 million in fiscal year 2012 before plummeting.
The dips, going back to the company’s founding in 2000, have not always been of Kalra’s doing. India’s economy has skidded badly of late, and its airline industry has gone into a tailspin. In the December quarter domestic air traffic, which accounts for the bulk of MakeMyTrip’s revenues, shrank 9 percent.
“When I look back, we survived a dotcom bust, investor pullout, industry slump, worked for zero salaries and bought out an investor,” says Kalra, a bit wistful. “It has been an incredible voyage.”
By listing on Nasdaq in 2010, MakeMyTrip set itself up to be compared with profitable online retailers in China and elsewhere. Investors have cut Kalra no slack for the singular challenges Indian online retailers face. Take Flipkart, started by former Amazon.com executive Sachin Bansal, which sells everything from books and perfumes to electronics. To overcome marketplace deficits, Bansal set up in-house warehousing and shipping. He even pioneered ‘cash on delivery’ to ease anxiety over online transactions, only to find buyers refusing deliveries at the door. “Even after battling infrastructural challenges, Indian online startups get very little time to build a brand and create customer pull before investors start getting anxious,” said GR Gopinath, who pioneered low-cost flying in India by founding Air Deccan.
MakeMyTrip itself sidestepped the tricky shipping hurdle with electronic check-ins and online hotel vouchers but not assorted other obstacles.
Kalra launched in October 2000 selling tickets and hotel rooms to immigrant Indians travelling back from the US. He outdid mom-and-pop rivals by offering customer support through webchat and a call centre. He interviewed employee number three, co-founder Keyur Joshi, while Joshi was on a train. Their chat was interrupted half a dozen times thanks to a bad connection and a noisy wedding party onboard. Joshi is now the chief commercial officer.
Airline travel is a standard experience, but customers booking slick-looking hotels online and arriving to find a dirty pool or a broken air-conditioner were sore. Sometimes in peak season small hotel owners refused to honour bookings when they could charge walk-ins more. MakeMyTrip’s brand took a bashing as customers angrily renamed it “RuinMyTrip”.
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(This story appears in the 17 May, 2013 issue of Forbes India. To visit our Archives, click here.)
Nice Analysis. But I guess it bit late now, if this was issued at time of its IPO, huge money of investor might have been saved. Price to sales of 10x was really an absurd level. As I recall all analysts were ultra bullish on the company with notable exception of one report from independent research analyst Ashish Tripathi of Anavaran Investment. Should have gone with him after all an Indian knows much better about Indian company dynamics rather than cushy guys of wall street. Also, was going through your article on Indian ecommerce. Looks like the entire industry is in trouble over their. Seems its difficult to make money on Asian website companies. Just a look at Rediff.com will justify the case.on Jun 26, 2013
Make my trip is a company with terrible customer experience. Tere is nothing like \'operation pioneered\' in MMT. Almost everything is outsourced. And AFAIK, the way this company runs is nothing very different than a government organisation.on Jun 4, 2013
The story should have included some customer perspectives too. The comments are all uniformly negative. Frankly, I don\'t see what role MakeMyTrip plays in today\'s online ticket booking sphere. If you want a flight ticket, go to the site of the airline and book the ticket! Whether it\'s IndiGo or Air India or Jet — whichever is your favorite career. For train tickets, I have only ever used IRCTC. The frustrations associated with trying to book a ticket on IRCTC are of course legendary but things appear to have improved now. Also, I don\'t see how booking a train ticket through MakeMyTrip would improve upon the IRCTC experience. And folks are \"actually\" booking travel \"packages\" on MakeMyTrip? Hotels?? Bus tickets too??? Who ARE these guys? May be the wealthy IT folks and other Green Card holders on their annual India trips? Clearly it\'s only they who would be willing to expose themselves to such rip-off schemes. I mean who actually \"books\" a hotel ticket in advance in India — except of course when it\'s an \'office\' trip and the bill is going to be paid by the company. @sachi_bbsron May 18, 2013
I\'m a old user of MakeMyTrip. Earlier I used it for booking train tickets. It acts nothing but as interface to IRCTC portal for which it charges 10 rs or more. So if I book a ticket worth 100 rs, IRCTC would charge 10, MMT would charge 10 and the bank would charge 10 as net banking fee. So its Rs. 30 extra on each ticket. The more tickets you book, the amount multiplies. So I skipped booking through MMTon May 8, 2013
My experience with makemytrip is not good either. Their customer care persons are immatured, lack experience and dishonest. They should invest in personnel training and need to be transparent in pricing especially for changing date of journey etc.on May 8, 2013
All this hype of customer care is crap....they refunded me for a ticket which was wrongly charge twice after One month of follow ups...their booking line get conencted asap but their customer care line takes ages..People working for prestigeous publications like Forbes should insvestiagte/work/talk with all shareholders in the chain instead of lazily publishing all Goody...Goody talk spoken by the promoters which is published as if it is a Gospelon May 7, 2013