As it continues to expand the e-commerce capabilities of Amazon Pay in India and expand on its “super-app” strategy in the country, Amazon has launched flight booking service in the India market.
Amazon has partnered with Indian online travel agent Cleartrip on the integration. Now, Amazon India users can book flights within Amazon.in just like on any other travel site. Amazon is offering an INR 1500 rebate to first time customers as a promotional launch offer.
Image Credit: Twitter user and travel industry consultant Robert Cole.
In our view there are a few different layers that make this move interesting.
1. Amazon’s travel offerings
Five years ago, Amazon launched and then 12 months later closed a direct hotel bookings service called Amazon Destinations. While Amazon didn’t comment much on the decisions at the time, it became apparent that Amazon found the operational aspects of building direct booking relationships with tens of thousands of lodging suppliers too costly and complex. Since then, Amazon has been generally quiet on the travel offering front.
Image Credit: Houstonia (2015)
This time around, Amazon is choosing to simply integrate a third party meta-search service, rather than build its own. This experiment is thus dramatically simpler than Amazon Destinations for a couple of reasons. One, because Amazon is not building meta-search in house (yet). And two, because the number of suppliers is much smaller – there are only hundreds of airlines in the world whereas there are millions of hotels. But even at this level of integration, Amazon serves as the payments intermediary and gets to potentially cross promote other products and services against customer travel data.
Big picture, we would not be surprised to see Amazon roll out similar functionality in other markets around the world. We also would not be surprised to see Amazon either build similar types of meta-search functionality in-house eventually. (Amazon could even theoretically acquire an existing competitor like Expedia or TripAdvisor that could provide a supply of hotel relationships.)
Amazon India is part of a broader trend, particularly in larger markets in Asia, in which e-commerce apps are effectively becoming a “portal” aggregating suppliers across verticals. Led by apps like WeChat in China, these apps have such strong user engagement that they are able to persuade other companies to build proprietary “mini-apps” within their “super-app,” thus giving the super-apps significant leverage as a distributor.
Google is increasingly doing this through Google Maps (restaurant reservations, event bookings, etc.), Facebook has been attempting to do this in various forms for several years with mixed results, and Amazon is doing it through Amazon Pay (utility bills, phone balances, and now flights). The super apps that are successful tend to focus on simplifying the logistics of daily life (like meals, transportation, and payments).
WeChat Image Credit: Connie Chan of A16Z
While super-apps are not as prevalent in the west as they are in Asia, it’s an important product trend, particularly as a few big internet companies (Google, Facebook, Amazon, etc) continue to seek to maximize engagement as growth in their primary businesses slow.
The last point we’d make here about travel is its synergy with Amazon’s advertising business.
Amazon continues to grow its advertising business primarily though purchase-funnel ads on its site but also through display units that it runs across its networks and properties. By simply integrating travel meta-search, Amazon could theoretically sell more travel ads by pointing more travel related traffic to these new services and tools.
Travel advertisers are looking for alternatives to Google and Facebook, and currently Amazon doesn’t offer comparable opportunities in the way of travel ad inventory.