"The market has changed. A couple of players raised money and started the discounting game. Discounting has power, as you may have seen from the game by e-commerce players. We had to respond," said Kalra. "Apart from investing in our mobile tech space, we will venture into new categories such as pilgrimages and adventure travel that have great potential for us," he added.
In addition, MakeMyTrip has granted Ctrip permission to acquire MakeMyTrip shares in the open market, so that combined with shares convertible under the convertible bonds, Ctrip may beneficially own up to 26.6% of MakeMyTrip's outstanding shares. Upon completion of the investment, Ctrip will acquire the right to appoint a Director to the MakeMyTrip Board of Directors.
The company will focus on further strengthening its leading market share in the Indian online travel market by offering customers the best mobile booking experience across its full service travel products platform, especially as rising smart-phone penetration is driving an inflection point in India's online travel opportunity.
Kalra added, "We are delighted to have Ctrip invest in us. Ctrip is the dominant market leader in the online travel market in China. We believe there are many similarities in the Indian and Chinese online travel markets and we expect this strategic relationship between two market leaders to be mutually beneficial."
James Liang, CEO and Co-Founder, Ctrip commented, "Today's announcement marks the beginning of the strategic relationship between Ctrip and MakeMyTrip. Through this transaction, Ctrip has now gained exposure to India's fast growing online travel market."