Kumar, co-founder and group CPTO, ixigo, says that “one of the biggest advantages ixigo has is its product and tech intensity. We took bold bets on building a research team that worked on AI and data-driven predictive use cases such as train seat availability prediction, flight fare prediction and automated seat selection. Today these advanced algorithms and the millions of data points we feed into them every day ensure that our users get better information for making buying decisions”.

ixigo is the OTA for the next billion users, with its focus on localised content and app features that aim at solving problems of Tier II/III travellers, with 95.26 per cent of its transactions in FY2022 driven by smaller towns and cities. The travel company has a deep penetration in the ‘next billion user’ market, which comprises users predominantly from Tier II and Tier III cities and rural India. 

“We have been serving the next billion users for a while now. The initial users were a flight and hotel-centric audience, whereas the next billion were more of a train and bus-focussed audience – more utility-driven. We were one of the first companies back then to solve all their problems and concerns across planning, booking and travelling,” says Bajpai, focussed on addressing travel-related issues, a fact reflected by 22.58 monthly average sessions per user per month in July 2022, which was the highest engagement among all OTAs in India in this period, according to a Frost & Sullivan (F&S) report. 

ixigo also saw huge opportunities in ground transportation. In February 2021, the firm acquired ConfirmTkt, a fast-growing train-focused business, and together they became the number one OTA for train bookings in India with over 42 per cent market share among OTAs by the end of FY21. In August 2021, ixigo added another important leg to its next billion user growth story, through the acquisition of the bus business of AbhiBus.

These new acquisitions are playing out well for the travel company as can be seen from the results of ConfirmTkt which has grown revenue by approximately 245 per cent during the year. With the AbhiBus acquisition, ixigo is now the second largest bus OTA in the country with a strong headroom for growth.

“We are committed as a team towards our joint vision of serving the underserved market segment of the next billion travellers in the country, for whom trains and buses are the primary modes of transportation. Together, we endeavour to drive more synergies in selling buses, trains, and flights across the entire group to the next billion users from Tier II/III/IV towns in India,” says Bajpai. 

New milestones

As per data.ai (formerly App Annie), the app with maximum downloads for FY22 is ixigo (including ixigo Trains, ixigo Flights, ConfirmTkt and AbhiBus) with 46.12 million app downloads. ixigo is ahead of all other Indian OTA apps in this metric. ixigo group apps (ixigo Flights, ixigo Trains, ConfirmTkt and AbhiBus) have collectively seen the highest usage and engagement in July 2022 among all key OTA players and standalone transactional train mobile apps in India in terms of monthly active users, daily active users and monthly average sessions.

“The company was also the fastest growing OTA in terms of app downloads, with 5.18 million monthly app downloads in July 2022, which were more monthly downloads than all other OTAs in that month,” states the F&S report.

“We are proud of touching some new milestones when it comes to scale. We have also been able to improve conversion and cross-sell rates to monetise our large user base better, resulting in rapid growth in transactions and revenues,” says Kumar pointing out that the company’s financials have also charted growth despite two waves of Covid.

ixigo’s navigated the pandemic with 3.4 times growth in revenues during Fiscal 2020-2022. The gross transaction value (GTV) net of discounts and cancellations of R474 crore places ixigo on the second spot in the market with respect to the comparative GTV for FY22. The company managed to continue remaining adjusted EBITDA positive, with an adjusted EBITDA of R6.2 crore in FY22. Its entry into net positive numbers shows it will be one of the handful of profitable companies to hit the IPO market in the next few quarters.

“In terms of recovery, we were probably the fastest to not just recover but also exceed pre-Covid levels of transactions, traffic, revenue and GTV. It has been a tough 2 years for most travel businesses. If you look at our history and how we have built the company – we have been one of the more frugal and least funded players in the industry. We are also culturally a lot more aligned towards growing in difficult times. We have been very customer-focussed and we decided we are going to treat customers extremely well during Covid waves – instead of letting go of our employees, we hired more resources for our CX teams. We introduced traveller-friendly features like travel guidelines, ixigo Assured, etc. We have been serving the more resilient Tier II/III/IV traveller market which was impacted less by the pandemic and bounced back faster,” says Bajpai. 

Riding the new travel wave

Post Covid, there has been a surge in travel as people who have been confined to their homes for nearly 2 years have now started travelling with a vengeance. New carriers such as Akasa Airlines are making their presence felt.

Bajpai sees the entry of new airlines as an exciting, stimulating chapter for India’s travel industry post the pandemic. “New airlines are bets on long term growth as overall penetration of around 11-12 crore passengers is still low as a percentage of population compared to other developed countries. Emergence of new airports in places such as Darbhanga and Jharsuguda as well as religious travel to places such as Shirdi and Deogarh will drive growth,” says Bajpai.

The technology-focused company is now looking at ramping up operations for its next leg of growth by improving efficiencies in business processes and operations. The travel company is looking to raise Rs750 crore for organic and inorganic growth. ixigo has been continuously investing in technology using artificial intelligence, data science and machine learning to transform its travel information and crowd-sourced data in business intelligence in order to enhance its travel offerings. 

One of its important solutions has been the rollout of its 100 per cent AI-driven, personalised travel assistant TARA, which is powered by deep learning. This differentiates it from the typical chatbots that are offered by other players. ixigo is also focussing on offering its users greater convenience and flexibility through the launch of value-added services.

The travel company has recently launched its ‘ixigo Flex’ feature offering flyers fully flexible and freely reschedulable airline tickets starting at a nominal price point, giving users flexibility to reschedule their travel bookings if they wish to for any reason. In addition to rescheduling with ixigo Flex, the travel app also offers no questions asked, full refunds on all domestic flight bookings at a nominal charge through its feature ‘ixigo Assured’ which was launched in 2020. 

ixigo’s use of artificial intelligence, data science and machine learning to transform its travel information and crowd-sourced data into business intelligence has enhanced its travel offerings and improved its operating efficiency. The company is seeing faster growth as well as lower acquisition costs leading to more than 85 per cent of organic traffic every year (through non-paid customer acquisition channels). ixigo is spending lower amounts on customer acquisition cost, which has reduced from Rs94.95 per customer in Fiscal 2020 to Rs84.22 per customer in Fiscal 2022 despite the year-on-year increase in new customers. 

ixigo’s multi-app strategy has also allowed it to differentiate itself from other players in the market. Unlike other OTAs, ixigo has separate apps to deal with trains, buses and flights, which allows it to focus on its rail and bus segment while keeping other facilities under its umbrella as well. Its multi-app strategy has allowed it to be relevant to both the most evolved Tier I travellers and the aspiring Tier II/III/IV travellers. 

While the industry has faced some noteworthy headwinds, there are many indicators for recovery as well. Domestic travel, fuelled by revenge tourism in FY22, has aided the growth of the Indian hospitality and tourism industry. A decline in Covid cases, resumption of international flights from March 2022, strong leisure demand and rising corporate travel demand are positive factors that will lead to further growth in the sector. 

“The size of the Indian travel market was worth Rs4.9 lakh crore for flights, hotels and buses in FY20. However, it was impacted by Covid-19 in FY21 and FY22. We expect it to make a full recovery by FY24, growing to Rs5.2 lakh crore. By FY25, we expect it to be Rs6.2 lakh crore, growing at a 39 per cent CAGR from FY22-FY25,” points out Santosh Sinha, Axis Capital, in a report. 

That’s no doubt good news for one of the prominent brands in the OTA space, and should keep the winds in favour of ixigo over the long haul.