One of the few companies to seize the opportunity is MakeMyTrip, the travel

site founded in 2000 that now dominates the market. When it launched its
U.S. IPO, in 2010, it was only the fourth Indian company to do so since 1999.
It has since grown to a market capitalization of $530 million. And other
domestic firms continue to flirt with public listings but largely resist them.

Earlier today, MakeMyTrip announced its majority acquisition of ITC Group, a

hotel conglomerate based in Thailand. The news came after two other
international hotel buys, a strategy the Gurgaon-based company has
been signaling of late:

The company also believes that South East Asia offers a huge opportunity in the hotels and
package tour business. It also said that only 5 per cent of the hotel industry in the country
has adopted the online way for business and this offers tremendous opportunity in the
segment.

The Nasdaq-listed company which raised around $80 million through its IPO in 2010 has
already made two acquisition in the hotel and package tour segment.

Early in this month the company acquired hotel room aggregator hoteltravel.com for $25 mn
focusing on Southeast Asia. In 2011 MakeMyTrip had acquired Singapore-based Luxury
Tours and Travels for around $3 million.

Its direction shouldn't surprise stockholders. In the latest quarter, its hotel
and packaging showed a 20% uptick in revenues while growth from air tickets
tapered off. (And if you're into reading much into these things, its stock
price hasn't fluttered on the acquisition news.) The startup pioneer, praised
for its initial adjustment to Indian consumers, now looks to be banking that
the nation's affluent will be planning more trips to Thai beaches.

That's a reasonable bet, although with its airline tickets sales flagging its not a
tremendously safe one. The dramatic potential for Indian e-commerce lies less
with high-end ticket buyers than with the coming waves of young, largely non-
English speaking small consumers---the ones expected to devour gadgets,
mobile apps and cheap retail items. Yet unlike travel, those sectors are full of
tricky infrastructure potholes.

In a 2010 laudatory post on Deep Kalra, the MakeMyTrip CEO,

TechCrunch's Sarah Lacy hinted at this key advantage without spelling it out:

...Kalra played the copycat game the right way. Online travel is almost always one of the
first categories to take off in new markets, in part because it has a clear revenue
model that doesnt rely on mature advertising markets or sophisticated
shipping routes, since many of the tickets are issued electronically. And
in the early days, he tailored his site for Indias domestic travel market business US
competitors werent going to target. Ive used the site to book routes within India that I
couldnt have otherwise booked without a travel agent and pricey fees.

Unlike entrepreneurs who waste their time trying to build, say, an Indian Facebook
MakeMyTrip wasnt a re-skin, it actually solved problems unique to India. And Kalra
assiduously studied competitors to see what had worked for them and what didnt. Those in
the United States, and ones in other emerging markets like China. When done well,
copycatting is about adjusting to local markets and learning what the first generation did
right and wrong. You cant copycat something you dont deeply understand. [emphasis
mine]

Those other qualities Lacy assigns to Kalra are probably accurate, and
probably helped set his enterprise apart. But most credit should go to his
decision to move into a sales sector that could skip over shipping, the blockade
that facing so many aspiring Indian online operations.

Consider the Indian apparel market: at $50 billion, per the consultancy
Technopak, it is more than 20 times the travel sector. Investors are
beginning to pour cash into its e-commerce efforts. Yet, right now, its online
sales are roughly 0.1% of the total market. That's projected to grow but not
nearly to the level of online travel, for a number of reasons---though a
significant one is the nation's still perplexing shipping problems.

That obstacle, among many other flaws, is holding back India's current e-
commerce behemoth from becoming the next MakeMyTrip. In the July issue
of Forbes India, Rohin Dharmakumar offered the most comprehensive look
at the promising, beleaguered Flipkart. Since then the online retailer has
continued to bleed cash, its profitability uncertain and IPO at bay.

But it has also reaped in significant new infusions from investors, hopeful,
it seems, that another e-commerce player must make it out. It may be just too
alluring to ignore.