MakeMyTrip transaction market share gain strategy is playing out better than expected with more than 500% growth in standalone hotel transactions (materially ahead of guidance of 325-375% y-y) and corroborated by the latest Millward Brown survey suggesting MMYT has won material market share of ~4pp overall to 29% in Mar-16 (vs 25% in Jan-16).
The trends on market share gains though are divergent across 3 star or lower categories, where MMYT has gained material share (which would have likely reflected in the sharp increase in transactions), but has lost share in the 4/5 star categories (which are in our view the larger revenue generator for MMYT currently).
In lower category 3 star or lower categories MMYT market share has increased by 8pp to 33% and 13pp to 35% in Mar-16 respectively (vs last survey in Jan-16). However, MMYT has lost market share in the higher value 4/5 star category with ~4pp reduction to 22% (vs the last survey in Jan-16). From a transactions growth perspective, the 3 star or lower categories are larger, but from a net revenue perspective we believe the 4/5 star categories are larger for MMYT still, where Goibibo seems to be playing catch up.
