Customer obsession remains focus, AI will bring “unimaginable shifts”

After a three-year delay, ixigo’s parent company, Le Travenues Technology, is finally listed on the Indian stock exchanges and at its debut on June 18, listed at 78% premium over issue price, making it “one of tech’s most oversubscribed IPOs”, declared Aloke Bajpai, chairman, managing director & group CEO, ixigo.

Rajnish Kumar and Aloke Bajpai (right) marking a milestone in the journey they started 18 years ago (below). Photos from ixigo.

For him and co-founder, Rajnish Kumar, director & group Co-CEO, ixigo, who have been bashing away at it to solve customer pain points in India in rail, bus and flights – and now hotels – for the past 18 years, and with about $60 million in equity funding over its lifetime (before going public), it is, without exaggeration, a major milestone.

“It’s one of those moments, when you have worked hard for something, and it finally happens. You’re relieved it’s behind you, you feel a sense of accomplishment and the team, who’ve supported you, is super happy,” said Aloke.

“In some sense, nothing has changed. We will continue to run the company the same way, the same principles and values, with the same customer obsession. In terms of regulation and compliance, we have to be a lot more prudent about how we do things but the last three years, we’ve already been applying those rules.

“We have been ready since then,” he laughed.

Rajnish added, “Yes, nothing changes yet everything has. The milestone is a validation of 18 years of hard work. The external validation has made it worth it. We are relieved we have created value for ex-employees as well as current ones. Now we have a bigger responsibility, the additional 100,000 shareholders who are part of the new journey.”

And it’s been a good start thus far, with ixigo finishing FY24 on a high note. In its earning release, it reported crossing 480 million annual active users cumulatively across the group with GTV growing 38%, “reaching an all-time high of INR 10,283 crores, up from INR 7,452 crores during last year, making us the fastest growing OTA on GTV in India in FY24”.

Profit After Tax for FY ’24 came in at INR 73.1 crores recording a nearly 212% increase in FY24 and it grew by 55.2% YoY in Q4 FY24. “We have also hit double-digit Adjusted EBITDA margins in Q4 and gained market share in all three key verticals of flights, buses and trains during the year despite limited capacity growth in the overall market during the quarter.”

Speaking to the scale of users, it said it hit around 8.3 crores MAUs in September 2023, and for FY2024, it had almost 7.7 crores Monthly Active Users on average with over 10.5 crores app downloads added across ixigo, ConfirmTkt, and AbhiBus during the year. (One crore is 10 million)

“Over 9.5 crores passenger segments were booked with us during FY24, and we touched an MTU to MAU ratio of 3.4% in Q4 of FY24. Our flights business has outperformed with 77% YoY growth in passenger segments. We are leveraging GenAI to expand our AI capabilities and enhance our efficiency and customer experience.”

Executing on three priorities in next phase of journey

And as it begins its new journey in the public markets, both founders are adamant about keeping their heads down and executing to solve customer pain points, as they’ve been doing for the last two decades.

For the next 12 months, Aloke said ixigo would be focused on three things – building up its hotels category, which it entered last December; building a B2B component – a “travel super mall” to give access to its inventory to agents and offline channels in smaller towns; and undertake distribution deals such as the most recent, with PhonePe, the leading UPI app in India.

Said Rajnish, “Our biggest advantage with hotels is we already have the distribution and our job is to cross-sell and upsell to our users. We are seeing encouraging growth. We have to figure out what sells to our customer cohort and then crack direct deals.”

Aloke said the string of travel IPOs in India recently was also a milestone for the country. “I’ve never been as optimistic as now. When we started, there were hardly 10-15m Internet users, there was no mobile Internet, no payment, it was only the elite looking for flights.

“It’s extremely exciting. The average Indian now  has access to the cheapest data plan with the same access to information and tools as everyone else; we’ve seen that happen before our very eyes. It’s a much more dynamic, optimistic and energetic environment.”

Added Rajnish, “It feels like we’re just getting started. We’ve only scratched the surface of what we can do.”

Rajnish Kumar (left) and Aloke Bajpai: “We want to build the best customer experience in travel, there are no benchmarks anywhere.”

India has the capabilities to lead in AI travel innovation

Rajnish, whose eyes glow when he speaks about fixing customer problems, will have his work cut out for him and he is more excited than he’s ever been with the advent of generative AI which he said will change the industry “beyond what we can imagine”.

And he believes India, with its market size, digital infrastructure and ability to solve problems at scale with economically viable solutions, will be the leader in AI-led travel innovation in the years to come.

“We’ve been waiting to reach inflexion point and here we are – economy, investment, technology, travel. Our advantage is, literally, hanging in there and building for the next billion users. There was no monetization in sight for the first 10 years but we continued to build and solve customer problems.

“We want to build the best customer experience in travel, there are no benchmarks anywhere. It goes back to the simple belief that not many companies survive in the long run unless it has a superior customer experience and we have done that not by throwing people at the problem, but tech and AI.”

Using tech to solve specific, nuanced problems – rail was the breakthrough

Rajnish, whose philosophy is “never to look at the competition but to find problems before others find them ”, said ixigo had been investing in AI since 2017 and this has given the company a strong foundation to take advantage of the acceleration to come in AI to solve customer problems.

Ninety percent of customer support is now bot-handled. “We have a voice agent platform which makes and receives phone calls, to solve end-to-end problems. It is able to analyse conversations in English, Hindi and “Hinglish”, to understand what went well and use that as feedback loop.”

According to Aloke, one obsession it has had is around refunds, a persistent problem in ecommerce – how to give immediate refunds and build trust with customers.

This is especially critical in rail travel in India, said Rajnish. “It has a high booking failure, people book in a hurry, there’s a waitlist and we tried all kinds of innovation to give immediate refunds. Also, for the people booking trains, 1,000 rupees is a lot of money and they can’t book a new ticket without getting the refund.”

To address this need, It launched offerings like ixigo Assured, Assured Flex and Abhi Assured to empower travellers with free cancellations, instant refunds and flexibility in travel bookings.

Indeed, you could say the turning point for ixigo came in 2013 when it moved into trains and launched its train app a year later. Prior to that, it had been competing in the red ocean of flights.

Said Aloke, “The Western template in building an OTA was to start with flights, then hotels. We did that too, and then realised only four percent of Indians fly. If you want to build the largest OTA, you have to be relevant, so we went into rail, and saw the opportunity to develop something specific and nuanced for Indian train travellers.”

Keeping the bar high on tech excellence – “AI will bring unimaginable shifts”

 Its mission remains to use tech to solve specific and nuanced problems for Indian travellers, for those travelling domestically and internationally.

There are problems still to be fixed in flights, especially in the post-booking. Said Aloke, “People need handholding. We created automatic web check-in, as soon as flights open. Once checked in, you get your boarding pass in your wallet. You reach the airport, it tells you which counter to check in, which boarding gate, which belt. We offer this for free, it costs a lot of money in R&D but it is the only reason customers stick around.”

Keeping this level of customer obsession through product excellence is challenging but Rajnish said, “Excellence is one of our core values. We create a bar that is extremely high and when we reach it, we raise it. It never stops and the only way to inculcate this value is by exemplification.”

He confesses to being tough on his tech and product teams, but believes it’s what is needed to hold on to excellence.

Whether this “tough love” will work on the next generation of talent, he’s not sure but what he’s certain about is “I don’t think the world is prepared for some of the shifts that AI will produce”.

ixigo was one of the first players to launch AI-based data-driven features, such as a multilingual travel assistant (TARA), live running status, Siri shortcuts, and an AR coach position feature, which allows train passengers to locate their coach positions at more than 7,000 railway stations across the country. In July 2023, it became the first OTA in India to launch a Generative AI-based travel planning tool named PLAN to help travellers plan their trips, get itineraries and real-time information and recommendations based on input criteria.

Said Rajnish, “Some of us may be more prepared than others – we have 80m monthly active users, a huge footprint – and if we launch AI-enabled translation, we can have 80m people using it next month but at the same time, these tools will become commodities. Everyone will have the same power, so what can I do with them, around my proprietary data and context? And our context is around how well we understand the next billion users and their behaviour.”

Saying “there will be way more disruption than any tech inflexion point in our lifetime”, he said, “before, you could afford to miss the news for a month or two but now if I miss it in one or two days, I am out of date.”

He added, “It’s still early days, only companies that are tech-savvy have the advantage now but once it becomes so good and widespread, there will be easy access to it. It will become possible for someone to spawn a company, create a platform, using AI agents – a one-man company. That’s not far away.”

He said ixigo was spending 10-15% of its resources on AI. “We need to know where the tech is headed and think 10 years ahead. By doing that, we ensure we are the disruptor, not the disrupted.”

Staying true to customer obsession requires sacrifice

Saying “customer obsessed” is easy, living it is hard, said Aloke. “It requires sacrifice, you have to make tough decisions.”

He cites the time during Covid when refunds started to exceed bookings. “Most companies were holding back money. By March 5, 2020, before lockdown on March 25, we had started refunding the top 10 countries impacted by the crisis.

“On the customer side, when the payment escrow fund ran out of money, we crowd sourced for the money from our team and refunded on our own. Two-thirds of our team worked in customer support seven days a week for two to three weeks, handling “humanly impossible” volumes.

“As tough as these measures were, it was the right thing to do,” said Aloke.

Added Rajnish, “Principles are tested during difficult times and now we’re being rewarded. We are at six times the scale of pre-Covid. We gained market share – and I believe that’s because we took care of people.”

Lessons for other markets from India-led innovation

Asked if there were lessons Western models could learn from Indian tech companies in terms of innovation, Aloke said, “India has leapfrogged in adoption and we have found uniquely Indian ways to do it. We are one of the few democracies that have electronic voting. Covid gave us electronic authentication. UPI is one of the world’s best, with more transactions than China.

“I believe uniquely Indian solutions to problems faced by Indians will set the tone for every country in the world. In every sector (in India), the top companies have created unique solutions that work for India – ecommerce apps with cash on delivery, hyperlocal deliveries.

“Our physical infrastructure is behind but in digital, we are streaks ahead. UPIs are being rolled out in other countries. Imagine if we made the entire stack – with digital identity included – available, especially for developing countries with similar problems.”

Rajnish said, with the scale of China and India, what needs to be innovated is the economics of the problem you’re trying to solve. “Innovation happens out of necessity. Airport security – a tough problem, the Western solution is expensive, 3D scans. In India, we solved it the cheap way with Digi Yatra.”

(In less than two years, Digi Yatra, a Self Sovereign Identity tool using face biometric technology, has crossed four million registered users and is operational in 14 airports across India.)

Said Rajnish, “We can solve problems at scale with solutions that are economically viable.”