MakeMyTrip paves the way for Flipkart entry into online travel segment

SoftBank-backed online marketplace major Flipkart has announced a strategic partnership in the travel services segment. Following the move, the Bengaluru-based company will showcase MakeMyTrip offerings such as flight, hotels and bus booking on its platform.

The partnership will start with domestic flight bookings in the next few weeks, followed by aforementioned services, mentions a statement released by the company. Last month there were some media reports surfaced hinting Flipkart’s plan to enter the OTA segment.

The move seems to be in sync with Flipkart’s strategy to diversify into categories and drive more GMV (Gross Merchandise Value). After four years gap, the company also had re-launched grocery vertical and also planning to enter financial distribution space.

Interestingly, the partnership is being forged at a time when a majority of OTAs including Cleartrip, Via and Yatra are struggling in air ticketing space because of wafer-thin margin without a loyal customer base.

Flipkart debut in travel space will impact Paytm directly which has been playing a platform play card in several vertical including air, bus, and entertainment (movie) ticketing space for quite some time.

Notably, after exploring three years in hotel aggregation space, the Noida-based company had recently shut down hotel booking service in the wake of poor traction.

Earlier, there was a report of merger talks between MakeMyTrip (MMT) and Flipkart. However, this seems to be a speculation as we don’t see any further light prevailing over the deal.

Eight months ago, Flipkart had raised a massive sum of $2.5 billion from Softbank. Currently, it’s also negotiating around $10 billion funding deal with US-retailer Walmart.

The inflow of funds has put a new confidence in the company, that has earmarked $1.25 billion for acquisitions. Observers hint that Flipkart may trigger consolidations in fintech, grocery, entertainment ticketing as it eyes to create wide adoption for PhonePe and strengthened ecosystem around its brand.