On Thursday, Walmart-owned Flipkart announced that it will acquire online travel aggregator, Cleartrip. The contract will allow the e-commerce giant to bolster its presence in the online travel space and become more fierce a competitor against Amazon. Even though Flipkart and Amazon offer flight, bus, and train bookings, companies like MakeMyTrip and Cleartrip have been major players in this space. This acquisition could also help the Flipkart grow its business and revenues.
As per the terms of the agreement, Flipkart will acquire all Cleartrip operations, although Cleartrip will continue to operate as a separate brand. The agreement also indicates that Flipkart will acquire 100 percent of Cleartrip’s shareholding upon the closure of the deal. All Cleartrip’s employees will be retained to further develop travel tech solutions.
Kalyan Krishnamurthy, CEO, Flipkart Group, said “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”
Financial terms of the acquisition weren’t released to the public. However, the deal size is reported to be around $40 million.
Flipkart signed a deal with MakeMyTrip in 2018, to enable travel bookings on its platform. Later, in August 2019, Flipkart entered an agreement 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.
Cleartrip was one of the first big travel aggregators founded in the year 2006. In 2018, the company brought an Alexa integration which let users book their flights and hotels using their voice. The company also tied up with Flipkart arch-rival Amazon in May 2019 to bring flight bookings to Amazon Pay. Neither Amazon nor Flipkart have commented on whether they would continue with Amazon Pay on Cleartrip.
Flipkart will be directly stepping into the travel aggregators market by bringing Cleartrip on board. The deal also comes at a time when people are refraining from travel due to the coronavirus spread. India’s travel and tourism sector is expected to grow by 6.7 percent to reach INR 35,00,000 crores and account for 9.2 percent of the total economy by 2029, according to the India Brand Equity Foundation (IBEF).