Travel giant MakeMyTrip reported 135% increase in net revenue to around USD 141.2 million in Quarter-1 of 2017, despite soaring losses due to increased expenses post its merger with Ibibo. Overall revenue has grown by around 55% to USD 192.1 million, compared to same quarter last year.

Increased expenses are one of the main reasons the Gurugram-headquartered company has been incurring massive losses. In the first quarter of this year, marketing and sales promotion-related spendings of MakeMyTrip surged from USD 52.7 million to over USD 133 million.

Commenting on the current scenario MakeMyTrip CFO Mohit Kabra mentioned,

“We will continue to drive new customer acquisition in a significant manner, and therefore, continue to invest behind marketing and promotions at least right through this fiscal. We will continue with our high-spend strategy so that the market share gains continue to be there.”

The expenses incurred include the brand advertisement and customer inducement expenses of Ibibo Group, which was acquired by MakeMyTrip last year in October 2016.

Post the finalizing of  merger deal with Ibibo in February 2017, the parent company’s overall operational costs underwent a massive increase of about 58.5%. Between April and June 2017, employee costs of MakeMyTrip also grew to USD 29.8 million, from the earlier USD 13.1 million.

The Ibibo group was sold to MakeMyTrip and as per the terms of the deal, Naspers and Tencent who owned the Ibibo group would continue to remain the largest shareholders in the resulting company with a combined stake of about 40%.

The merger has resulted in the consolidation of the online travel-tech space. And as a result, MakeMyTrip has emerged a mega entity that aims to control a fifth of the lucrative airline booking market and also have significant shares in the bus and hotel bookings, and ride-sharing spaces.

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Shivani Pandita

Shivani is an avid reader and loves to pen down her thoughts on paper in the most creative ways. She is more on the eccentric side, but it is this obscurity and uniqueness that makes her stand out. She has a passion for photography, travel and music. She strikes a thorough balance between intelligence and creativity and has a solution oriented approach to any problem at hand.

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