Photo Credit: Reuters
Flipkart on Thursday announced that it is acquiring online travel aggregator Cleartrip for an undisclosed amount. The deal will allow the Walmart-owned e-commerce giant to bolster its presence in the online travel space and become a stronger competitor against Amazon. Although both Flipkart and Amazon offer flight, bus, and train bookings, companies like MakeMyTrip and Cleartrip have been key players in this space. This acquisition could also help the company grow its business and revenues.
Flipkart will acquire all Cleartrip operations, though Cleartrip will continue to operate as a separate brand, as per the terms of the agreement made public through a press statement. The agreement also states that Flipkart will acquire 100 percent of Cleartrip's shareholding upon the closure of the deal. Cleartrip will retain its employee base.
“We welcome the Cleartrip team with their deep industry knowledge and technology capabilities to the Flipkart Group and look forward to providing deeper value and travel experiences for customers together,” said Kalyan Krishnamurthy, CEO, Flipkart Group, in a prepared statement.
Financial terms of the acquisition weren't disclosed publicly. However, the deal size is reported to be around $40 million (roughly Rs. 299.8 crores).
In 2018, Flipkart partnered with MakeMyTrip to enable travel bookings on its platform. Later, in August 2019, Flipkart signed a deal with Gurugram-based Ixigo. Since then, the travel industry has faced an uphill struggle, with over a year of COVID-related restrictions having a huge impact on travel.
“We are delighted to be part of the Flipkart family and are excited about the positive impact this collaboration can have for our customers and the travel industry in general,” said Stuart Crighton, CEO and co-founder of Cleartrip.
Founded in 2006, Cleartrip was one of the first big travel aggregators, although from third party data, one can see that competitors like MakeMyTrip and Ibibo, which joined forces in 2017, grew far more popular over the years.
Cleartrip in 2018 brought an Alexa integration to let users book their flights and hotels using voice. The Mumbai-based company also partnered with Flipkart arch-rival Amazon in May 2019 to bring flight bookings to Amazon Pay.
Amazon and Flipkart both declined to comment on whether they would continue with the Cleartrip offering for Amazon Pay.
By bringing Cleartrip on board, Flipkart is directly stepping into the travel aggregators market that already has EaseMyTrip, Goibibo, MakeMyTrip, and Yatra, among others. The deal also comes at a time when people are avoiding travels due to the coronavirus spread.
According to the India Brand Equity Foundation (IBEF), India's travel and tourism sector is expected to grow 6.7 percent to reach Rs. 35,00,000 crores and accounting for 9.2 percent of the total economy by 2029. The country is also populated with a large number of platforms enabling online booking and planning for both domestic and international travels.
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