NewsNusaTrip wants to be the preferred OTA for the Indonesian marketThis article was originally published onBy Karthick Prabu | July 24, 2013 The Indonesian online travel market is fragmented, maturing, and quite interesting.The market works slightly differently compared to elsewhere. For instance, the preferred mode of payment in Indonesia is bank transfer.Another example: BlackBerry is the leading smartphone in Indonesia, with 15 million users. (That's a huge slice of the 80 million users worldwide.)Having noted such quirks, you have to be impressed by the growth of the Indonesian travel industry. A screen grab, below, shows the projected domestic airline traffic growth.A crown to be wonA leading contender to become a household brand name in this market is NusaTrip, a Jakarta-based online travel agency (OTA) that sells flights and hotels. [Nusa means "island" in Bahasa Indonesia.]The company was founded by Hans Ebenhahn, currently the CEO. There are about 30 people working at NusaTrip, and the company is actively looking to expand its team.NusaTrip is established under the GLB group and received a few million US dollars in funding. [The exact amount was not disclosed.]We asked Ebenhahn about what prompted him to start the company: "After looking at the Indonesian online market for a while, I realized that one of the pillars of e-commerce was not really existing, and that's online travel. "After deep study, I understood that entrepreneurs have been avoiding it due to the complexity and also because not all local airlines have electronic tickets yet. "With so many local airlines in Indonesia and no online travel company serving that market, it just made sense to launch a OTA dedicated to the Indonesian market."Share this quote Ebenhahn says that Indonesia is becoming very competitive and acknowledges that there are quite a few local players (competitors) in the market, but many of them focus on hotels, and few OTAs fully cover domestic travel.Q&A with Ebenhahn below.Describe what your start-up does, what problem it solves and for whom?NusaTrip is an online travel agency that aggregates more than 460 airlines and 100,000 hotels in Indonesia and abroad. We're the only Indonesian player to offer such a wide choice in a single portal. So, it becomes easy for users to book their flight and hotel needs without juggling multiple websites.NusaTrip has a sleek user interface. We have integrated quite a lot of local payment solutions to make it easier for Indonesian travellers to buy online. We support many forms of payments - Pay by ATM, internet banking, SMS banking, online payment solutions, and finally, using credit card (which is not widely used in Indonesia).Why should people or companies use your startup?When a user wants to book a flight from any city in Indonesia to an overseas destination, NusaTrip will be the only one to show the user all of the available flights with best fares. Most offline travel agents would not be able to pull the fares we find.In Indonesia, a majority of the airlines have medium-sized aircraft, so it's common to see an airline flying more than 10 daily flights to all popular destinations. This being the case, when a user wants to book a domestic flight, popular routes will have hundreds of possible flight combinations at various price ranges.That's where NusaTrip comes in, to help the user find the best flight deals.Other than going viral and receiving mountains of positive PR, what is the strategy for raising awareness and getting customers/users?Recently, we secured a marketing budget to cover the whole spectrum of e-commerce digital advertising and some offline activities.There is no single successful digital channel in Indonesia. We are trying many channels to see what works the best. There is a long list of partnerships to establish, and we are tackling them one by one.Conversion rates are very low in the Indonesian online travel market compared to other markets.Estimation of market size in Indonesia?It's very difficult to get any reliable market data in Indonesia, especially for the online travel industry.Domestic air travel is on the rise, while international air travel at this time is quite small in comparison.For hotels, we don't really have any good numbers or market analysis to work with that can be extrapolated from.But, by the end of the year, hotel room capacity should be at around 285,000 nationwide. A lot of capacity is getting built to address the demand, and all international and local players are very active in this space.What's your revenue model and strategy for profitability?The OTA model is not really new, so it's pretty obvious.Flights - In a market like Indonesia that is dominated by low/mid cost carriers, it takes quite some volume to reach profitability.Hotels - This segment has better profitability (compared to flights) but it's quite competitive and the customer acquisition cost is high.We will leverage all we can to get there, but for now our focus is on growth.Were there changes/any pivots along the way?We are still focussed on building a strong core product. Since the time we started NusaTrip, we have been monitoring the market very closely; we have put few key things on hold until we reach a point where we think it's time to execute them.We do face a lot of challenge on a regular basis. These challenges slow us down a bit. But that is to be expected.When the market is focussing on supplier-direct portals, will there be takers for a new OTA in the Asian market?There are so many flight and hotel options. Also prices change very frequently. So, customers definitely need portals that can understand and support their (local) needs. International OTAs do not address this.Where do you see yourselves in 3 years time, what specific challenges do you hope to have overcome?We want to establish our brand as the preferred online portal for anybody looking for a flight or hotel in Indonesia domestic or outbound.We will be adding a lot of services to cover the entire spectrum of travel distribution industry. There are lot of things to do. We will see how many of them we can handle in three years.Obviously, in three years, the competitive landscape will change. But we are quite confident that we have what it takes to build a great brand. This is a fast changing market so we have to keep things flexible and adapt (permanently).Tnooz view: Ebenhahn has clearly explained the reason for an another OTA in Indonesia. The Indonesian travel industry is growing like there is no tomorrow. NusaTrip's competitors include Tiket.com, Ticktab.com, PegiPegi.com, Tiket2.com and Gonla.com. The site's user interface is neat and the response time is pretty good. In addition to Bahasa Indonesia, NusaTrip also has an English language supported version of the site, which is an advantage that's rare among the players. The site supports multiple forms of payment - pay at ATM, pay by SMS, credit card, and bank transfer. However, this is a common expectation in an online portal in Indonesia. We compared the hotel price of NusaTrip with Tiket.com and PegiPegi.com. For the city of Jakarta and 28 July on all three OTAs, the highest price was on NusaTrip, and the cheapest was on Ticket.com. We can see that it's still a long way to go for NusaTrip to match the leading players in terms of price and hotel choices. NusaTrip claims that its distinguishing factor is its wide choice of domestic and international flights and its price deals. We have to agree to that claim, in flight choice and fare - NusaTrip wins the game hands down. We searched for one-way flights from Jakarta to Surabaya on 27 July for 1 adult in NusaTrip, Tiket.com and Tiket2.com. NusaTrip returned 40+ flight options, Tiket returned 10, and Tiket2 returned 19 flight options. Also, the fare in NusaTrip was the cheapest for majority of flight options. Ebenhahn says they have a product roadmap and there will be lot more new things in future. Hope, they build a mobile website and native app for NusaTrip very soon. In 2012, mobile phones became the preferred (62% of users in urban Indonesia) means of accessing internet in Indonesia. A quick exercise in Alexa shows that traffic to NusaTrip is more or less on par with few leading OTAs (PegiPegi, Tiket2), with Tiket.com taking the lead in terms of traffic. Overall - NusaTrip is an OTA that has the potential to join the top players list in Indonesia.Share this quoteNB: TLabs Showcase is part of the wider TLabs project from Tnooz.