Cleartrip 2.0: The second coming of the 16-year-old travel company

Cleatrip, which was acquired by Flipkart in a distress sale last year now becoming one of the fastest-growing online travel platforms

The Covid-19 pandemic wreaked havoc on businesses, especially in travel and hospitality. Among the victims was 16-year-old online travel company, Cleartrip. It witnessed a few years of grounded flights and shuttered borders due to the pandemic and had to deal with the chaotic task of handling cancellations and refunds for customers.

"It was a double whammy. The business and topline went to zero, and there was more pressure on the cost side," says Aditya Agarwal, chief financial officer at Cleartrip. "It is clear that the 2020-2021 period was the most challenging that we've seen as a company and as an industry."

In April 2021, Cleatrip was acquired by Flipkart in a distress sale as the e-commerce firm wanted to strengthen its e-commerce offerings for customers. However, Cleartrip has become one of the fastest-growing online travel platforms and a significant growth engine for Flipkart. This turnaround in fortunes came as Cleartrip got access to Flipkart's registered customer base of over 400 million, and India's travel industry is witnessing a resurgence.

"It is the second coming for the company or Cleartrip 2.0 for us," says Agarwal. "Almost every transacting customer in India is on Flipkart in one way or the other, and for a lot of internet users, Flipkart is one of the first brands they interact with."

He said a lot of the growth that Flipkart has seen in 2021 and 2022 comes from travel, where Cleartrip has played a vital role. "Our share of the overall business is only going to increase in the next few years," he says.

Indeed, experts said that on October 1, domestic air traffic stood at 96.6 per cent of the pre-Covid level. International air passenger traffic for Indian airlines has also been on an upswing.

Agarwal said Cleartrip had gained significant market share in the past 18 months. This was seen during Flipkart's recently concluded 8-day long festival sale event, The Big Billion Days (TBBD), where the e-commerce firm achieved a significant milestone of over 1 billion customer visits on its platform.

Between September 23 and 30, a 140 per cent increase was observed on the platform for bookings for travel next year, a reflection of the strong desire for Indians to step out and travel. Bookings for 4- and 5-star properties were 350 per cent higher, signifying how customers are moving towards luxury travel and hence such demand. Bhubaneswar, Goa and Jaipur were among the most popular domestic destinations, while Bangkok, Maldives and Singapore topped the international travel of choice. Tourism for destinations such as Shirdi and Varanasi also saw a rising interest.

"This is the first time we participated in the TBBD event, which is redefining the concept of affordability in the e-commerce industry," says Agarwal. "We tried to replicate that in the area of travel and have actually exceeded our targets and estimates. We have comfortably more than doubled our daily volumes (of business) during this period."

Agarwal said the firm had driven a shift in consumer behaviour where people can purchase products which give them flexibility. These include offerings such as 'EzCancel, Flexifly, and TravelSafe'.

During this year's TBBD, Cleartrip enabled access to attractive offers on domestic and international flights and domestic hotels. Hundreds of partners from the travel and hospitality industry were onboarded to provide access to customers with differentiated offers across flights and hotels. The users were able to access attractive offers on international and domestic flights.

Flipkart acquired 100 per cent of Cleartrip's shareholding in April 2021. Flipkart hadn't revealed the transaction's financial details, but the deal value was reportedly about $40 million. Subsequently, Adani Enterprises acquired a significant minority stake in Cleartrip in October 2021. Through this investment, the Adani Group and the Flipkart Group are benefiting from synergies that are expected to deliver superior travel experiences to consumers. According to sources, the move enables Flipkart to take on travel companies such as MakeMyTrip, Yatra, Booking.com, and EaseMyTrip.

Cleartrip continues to operate as a separate brand. It retained all employees working closely with Flipkart to develop technology solutions further to make travel simple for customers. For instance, Flipkart in September 2022 launched a new hotel-booking feature, Flipkart Hotels, on its platform to bolster its offerings in the travel sector. It will allow customers to book hotel rooms across 300,000 domestic and international hotels. Backed by Cleartrip's API (application programming interface), Flipkart Hotels will benefit from Cleartrip's deep understanding of travel customers and sectors.

"Our vision for building the business for the next 20 years is to lead with innovation and focus on customer problems and experience," says Agarwal.