Entrepreneurship is about finding solutions to problems where which others oversee. This is perhaps the reason why entrepreneurship is considered one of the highest forms of ‘Jugad,’ which is an Indian word for “a flexible approach to problem-solving that innovatively uses limited resources,” as stated by Oxford dictionary. This is a story of India’s one such Entrepreneur who thought out of the box and ended up creating one of the leading online travel aggregators in India – EaseMyTrip.
Rikant Pitti, the co-founder of EaseMyTrip, has an exciting story about how their company started. Back in 2005, OTAs were not so popular in India; people mainly preferred travel agents for their journey and tour plans. Pitti’s father was a businessman and, therefore, used to travel a lot. He always booked his flight tickets via a travel agent. One day, Rikant found out that their travel agent was charging 1.5k more than the price that was shown on the internet. His father had to travel over 15 times a month, which meant they lost more than 20k per month.
Start of the business
Rikant’s elder brother was an IITian (a student of India’s most premier institute for engineering). This also created an expectation for Rikant to enroll himself into an elite institute like his elder brother. Due to this, Rikant even took a drop year, which in the long run proved to be very useful. His father wanted him to be an engineer like his brother or a pilot, but he had other plans for himself.
After realizing that the travel agent was conning them, Rikant started booking the flight tickets himself. Initially, it was just for his parents, but soon, the words spread, and he was booking the tickets for the whole family. His father recommended him to his colleagues as they can see it was much cheaper to book the tickets through Rikant then to do it through a travel agent. What Rikant didn’t tell his father was that he was charging ₹100-500 on each ticket (fair enough! Both parties were happy.)
A lot of times, things don’t go as planned, and it takes a while to figure out why it happened. Rikant enrolled in Kurukshetra University for his bachelor’s degree. Since attendance was not an issue there, it allowed him to focus on his business plans.
Rikant, along with his brother, started Duke Travels and used bulk SMS as their marketing tool. It worked well as they began to receive clients from various parts of the country. Another innovation was selling the tickets on eBay (although, whether it’s legal or not, can be questioned).
As days passed, the company grew at a rapid pace. They decided to rebrand the company, that is how Duke Travels became EaseMyTrip. “Lowest costs and no convenience fees,” is their USP.
Things have not always been smooth, especially the initial days. While they were expanding, they partnered with Air Deccan. The business was going good as Air Deccan was selling air tickets at ₹500-700 range. But soon, the troubles started when Air Deccan could no longer afford to sell tickets at such cheap rates. This had a terrible impact on the business as Easemytrip was on the verge of shutting down. To survive, they lowered their prices and hired more travel agents who could help them reach their targets.
Currently, the Delhi-based travel platform has a turnover of ₹ 2400 crore (As listed in the FY18) and, according to the CEO and co-founder, Nishant Pitti.
“While observing the sales and booking of earlier quarters of the last year we were aiming to achieve a turnover of around Rs 2200 crore. However, we saw a significant rise in the last quarter results. In this quarter, we achieved around Rs 800 crore,” he said.
Around 50% of the company’s revenue is from flight bookings. Hence, B2B is the major revenue contributor for the company. Whereas, B2C segment drives about 30% of the total business.
The OTAs are currently one of the most competitive fields in India. One can guess how fierce the competition is that giant like MakeMyTrip and Ibibo had to merge rather than bleed out in the war. So how does Easemytrip still manage to survive?
What’s fascinating about this company is that even after all this fierce competition, EaseMyTrip is the first online travel agency to be listed on the Indian share market. The company has filed draft papers with the capital markets controller, SEBI (Securities and Exchange Board of India), for $72.13 million (₹510 crores). The Pitti brother’s company has hired Axis Capital and JM Financial as their merchant bankers for this issue.
Through the IPO, both the brothers, Nishant Pitti and Rikant Pitti, will each sell shares worth $35.77 million (₹255 crores) in the offer-for-sale mechanism. The objective behind this public issue is to gain profits of listing the equity shares on stock exchanges.
“Our company expects that listing of the equity shares will enhance our visibility and brand and provide liquidity to its existing shareholders,” – EaseMyTrip stated.
For a company that is just over a decade old (started in 2008), EaseMyTrip has undoubtedly left a mark on the travel industry of India and will continue to do so with its plans.