Deep Kalra, Indian online pioneer, has gained and lost his share of altitude. He keeps finding oxygen
In humongous India, where snaking lines and extended waits are emblematic, instant travel reservations herald a new mobility. Deep Kalra’s MakeMyTrip web operation pioneered the online travel field and at times has felt investor and customer delight.
But this is India, remember, and for the 43-year-old Kalra, as for many a service sector startup, the flight has been a bumpy one.
Today MakeMyTrip is fighting to stay profitable in an erratic economy and nascent ecommerce ecosystem. Kalra’s paper wealth, over $50 million, has been halved in 18 months and cut by two-thirds since a post-IPO peak. In the quarter ended in December, MakeMyTrip’s net revenues declined 5.5 percent and losses mounted to $2.6 million.
Even as investors pummeled the stock back to its $14 listing price, Kalra in an interview stoically takes refuge in Bollywood-speak. “Life is QSQT … quarter se quarter tak [quarter to quarter],” he says, using the popular acronym for the iconic romance film Qayamat Se Qayamat Tak.
“We have had plenty of highs and lows,” he recounts. Certainly, the highs have been many. Today one in eight flights within India is booked on MakeMyTrip. In the last four years MakeMyTrip has quintupled revenues, reaching $66.3 million in the first three quarters of fiscal 2013. Profits hit $9 million in fiscal year 2012 before plummeting.
The dips, going back to the company’s founding in 2000, have not always been of Kalra’s doing. India’s economy has skidded badly of late, and its airline industry has gone into a tailspin. In the December quarter domestic air traffic, which accounts for the bulk of MakeMyTrip’s revenues, shrank 9 percent.
“When I look back, we survived a dotcom bust, investor pullout, industry slump, worked for zero salaries and bought out an investor,” says Kalra, a bit wistful. “It has been an incredible voyage.”
By listing on Nasdaq in 2010, MakeMyTrip set itself up to be compared with profitable online retailers in China and elsewhere. Investors have cut Kalra no slack for the singular challenges Indian online retailers face. Take Flipkart, started by former Amazon.com executive Sachin Bansal, which sells everything from books and perfumes to electronics. To overcome marketplace deficits, Bansal set up in-house warehousing and shipping. He even pioneered ‘cash on delivery’ to ease anxiety over online transactions, only to find buyers refusing deliveries at the door. “Even after battling infrastructural challenges, Indian online startups get very little time to build a brand and create customer pull before investors start getting anxious,” said GR Gopinath, who pioneered low-cost flying in India by founding Air Deccan.
MakeMyTrip itself sidestepped the tricky shipping hurdle with electronic check-ins and online hotel vouchers but not assorted other obstacles.
Kalra launched in October 2000 selling tickets and hotel rooms to immigrant Indians travelling back from the US. He outdid mom-and-pop rivals by offering customer support through webchat and a call centre. He interviewed employee number three, co-founder Keyur Joshi, while Joshi was on a train. Their chat was interrupted half a dozen times thanks to a bad connection and a noisy wedding party onboard. Joshi is now the chief commercial officer.
Airline travel is a standard experience, but customers booking slick-looking hotels online and arriving to find a dirty pool or a broken air-conditioner were sore. Sometimes in peak season small hotel owners refused to honour bookings when they could charge walk-ins more. MakeMyTrip’s brand took a bashing as customers angrily renamed it “RuinMyTrip”.
(This story appears in the 17 May, 2013 issue of Forbes India. To visit our Archives, click here.)