Paytm said it plans to invest in marketing flight bookings on its platform as it focuses on inducing high-value repeat transactions. “Flights being a very new category with huge growth potential, we are looking to invest in marketing and scale the business aggressively,” said Abhishek Rajan, vice-president, adding that the company will invest an additional Rs 300 crore in the business.
In April, Paytm had said it is planning to invest around Rs 120 crore on its travel marketplace this year. “Bus ticketing business recently turned break-even and we are expecting our hotel booking business too to turn break even in the next two months,” Ranjan said. Paytm said over 1 million tickets were booked on its platform in August, and the company sees that number doubling by February. ET could not independently verify this number.
Market leader Makemytrip did 6.96 million air ticketing transactions in FY16 worth $1.28 billion, according to regulatory filings. Hotels and packages transactions were 3.14 million in the year worth $566 million, filings at MMT revealed.
Net revenue margin in air ticketing is close to 6% and in hotels and packages is 15.3% Paytm’s move is in line with its strategy to get customers on its platform to make more than one kind of transaction, from recharge, to education fees to offline transactions. “Share of repeat customers… is one of the key metrics that is being monitored,” said Amit Sinha, vice-president at Paytm. According to its founder Vijay Shekhar Sharma, Paytm has close to 17 million users who open the app everyday.
Rival e-commerce portal Snapdeal too has integrated bus, flights and food delivery bookings on the platform .
Paytm records monthly sales of about $300 million and incurs an operating loss of about 1%, which includes the cost of online marketing, maintaining a payment gateway and providing cash-back incentivesto consumers, according to Sharma.