Online travel start-ups join e-commerce fray

India is in the throes of an entrepreneurship revolution with online start-ups getting the support of both consumers and venture capitalists. Over the years a large number of online travel start-ups have entered the fray to cash in on the e-commerce boom that has to a large extent been driven by travel segment in the country. One of the biggest challenges in the online travel space is competition, both from other online service providers and from traditional travel agencies. The travel industry, especially luxury travel, is the first to suffer in times of recession or downward economic trend. Both these situations are more challenging for start-ups than they are for established companies. Start-ups do not have any additional capital or reserves to fall back on, and during an economic downturn, if people spend on travel they prefer to go to a service provider where service satisfaction is guaranteed and not experiment with a new entrant in the market.

Greyhound Research believes that it’s important to first understand why investors are willing to invest enormous amounts in e-commerce companies. “Investors who have invested an enormous amount in e-commerce companies expect a huge profit in return. The truth is that e-commerce players make a huge loss and raising funds is the only viable option to stay in the business and ahead of competition. While the cost of creating mobile and web commerce has declined considerably in the last few years, the key to survival of e-commerce model is customer acceptability and quick adaptability to changing market dynamics,” elaborates Sanchit Vir Gogia, chief analyst and group CEO, Greyhound Research. “Rising valuations can be considered as a herd mentality as there are more than enough investors willing to invest in e-commerce players. E-commerce has been a flavour for a lot of investors and thus the push to create a demand for such investments,” adds Gogia.  Twitter_logo_blue

To read the Full Article, click here: Financial Express

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s