Acquiring Buzzintown Will Add Value, Boost Cross-selling: Yatra CEO
Online travel services firm Yatra sprang a surprise when it acquired an events ticketing site Buzzintown for an undisclosed amount.Incidentally, the acquirer and the target firm are backed by a common venture capital investor â€“ Intel Capital. Techcircle.in caught up with Dhruv Shringi, co-founder & CEO of Yatra Online Pvt Ltd, for a quick take on its latest acquisition, and the trends and challenges he sees in the bustling Indian e-commerce space. Here are the excerpts.
Why did a travel services firm buy a deals and event ticketing site in the first place?
The ticketing business is fairly commoditised and you will always find some degree of similarity there although those services are offered by different players. We are planning to let our customers consume that new destination with the help of Buzzintown. As Buzzintown has been there for some time, it has already acquired a loyal customer base. In addition, the target audience for Yatra and Buzzintown is fairly similar. So there is the opportunity to cross-sell to that consumer base. Now, both of us are looking at growing the ticketing business to another level.
Of course, some degree of cross-selling is bound to happen between the two organisations as there will be some relevant customer base for both. Beyond that, Buzzintown will also act as a sourcing partner for Yatra in terms of deals, especially the in-destination deals.
The current Buzzintown team will continue to run the show. There will be no change in the management either.
But why did you choose Buzzintown in the first place? Is it because both the companies have a common investor â€“ Intel Capital?
The common investor acts like an intermediary arranging the marriage. But it's definitely not the reason for the marriage. We have chosen Buzzintown because it has a really strong team. Also, we feel that the ticketing services offered by the company are similarly aligned with what we provide. It's really important as Yatra is trying to move up the value chain â€“ from a purely transactional portal to a Website where customers can find out what all they can do after reaching their destinations. So it won't be only about getting there. We also want to highlight the activities that will keep you intrigued.
Are you keen to diversify into other e-com verticals? Will Yatra eventually become a horizontal e-commerce player?
Yatra may enter travel research and holiday research space. But we don't want to become a horizontal player. We will always remain closely aligned to travel and ticketing. This is our core competence and we intend to stay here.
What are the trends emerging in the e-commerce space? What are the key challenges that e-com players face in India?
As for trends, we have noticed that consumers belonging to tier II towns are driving growth to a large extent. Previously, e-commerce growth was mostly driven by the Indian metros. To be precise, it has always been an 'Eight City' phenomenon. But now, we are looking at a scenario where business is no longer restricted to those top eight cities.
The biggest challenge in Indian e-commerce space is the lack of innovation around digital payment. At this moment, digital payments are limited â€“ both credit card and debit card penetration is quite low. So we need to crack another mode of payment that will help propel e-commerce growth.
Yatra had earlier said that it's looking at a public float in 2013. Is there any change in that plan to go ahead with an IPO?
In these market conditions, it is very difficult to define a timeline. If you look at the market timing and the market condition, you will definitely realise that it must improve. Once it improves, we will evaluate when to launch the IPO.