Malaysian Travel Content Aggregator Platform
As the aviation industry suffered during the COVID-19 pandemic that caused lockdowns globally and nationally, a company that hit a new sales record of RM2.4 million in November 2020 was Malaysian startup T-Commerce Gateway (TCG).
Positioned between online travel agent (OTA) portals and airlines, TCG functions as a typical payment gateway between stores and banks.
During the pandemic, it was publicly evident that top-end revenues had been severely affected due to border closures and ground planes, KC Cheah, founder of Alpha Red Services, owner of TCG, told Vulcan Post.
“However, cost management is another critical point that has also come into play. Cost management is essential during the pandemic, it is even more so when the market recovers. “
“Therefore, TCG provides an efficient and cost effective solution for airlines to reach the wider market through online distributions. Consumers wishing to travel will be able to search and book their preferred airlines and schedules through our online travel agents without having to pay marketing expenses up front, ”he explained.
But that alone is not enough to ensure the resilience of TCG’s business model.
Well positioned for the pandemic
KC explained, “TCG is connected to airlines in several markets. Different airlines make up a good mix of markets serving different audiences and target routes. Our demand for content is therefore not heavily dependent on any particular airline, route or market. “
As international borders are closed and even Malaysia is under domestic lockdown, requests for domestic flights in well-recovering countries like Thailand and Vietnam, on the other hand, are also providing TCG with cash flow.
“Plus, we don’t need to invest heavily in marketing to increase bookings, as we’re running a B2B business serving online travel agents who manage consumers,” KC added.
Another thing that really helped TCG during this time was its pricing mechanism which maximizes margin, not to mention price competitiveness in the aviation market.
During the recovery period, KC said domestic flight sales contributed to a higher share of their revenue. Therefore, domestic flights with their lower pricing averages have provided TCG with higher margins through their pricing mechanism.
For comparison, he shared that their average monthly income for 2018 was RM400,000, while that for 2019 was RM770,000, with the exception of October 2019, where they generated booking income of 1.8 million RM.
The journey is here to stay
In 2021, KC is confident that we will see a strong recovery with a gradual opening of markets, followed by a full recovery in global demand by 2023.
“Travel has become a part of everyday life since the start of the decade, whether for work or play. This is why travel has benefited from the boom in recent years.
Reiterating a sentiment shared by many other players in the travel industry, he added: “There is no doubt that travel will return, but it is only a matter of when.”
And when that happens, the next key concern for them would be the state of mind of travelers about safety and travel restrictions. This will directly affect the demand itself, KC said, but they also have plans to manage that.
“Airlines are working closely with respective authorities to collect and disseminate the latest information to all travelers. So we are working closely with our airline partners to ensure that all information is also provided accurately and in a timely manner, ”he explained.
Meeting anticipated demand
In anticipation of future travel demand, TCG is looking to raise RM3 million on the ECF pitchIN platform to better serve it.
These funds will be primarily for working capital, as TCG expands its business partnerships with airlines and supports rapidly growing demand with the integration of more travel portal partners (mainly OTAs).
“After a positive fourth quarter in 2020, we expect US $ 18.77 million in gross reservation value transactions in 2021,” KC said.
He maintains an optimistic outlook for the year ahead as his team plans to expand his airline beyond the APAC region as well.
They are already working with airlines like British Airways, Scoot, Malindo Air and Vietnam Airlines, for example.
Thus, they are now looking for partner airlines such as China Southern Airlines, Singapore Airlines, Lufthansa, Fly Dubai, etc. for their expansion.
- You can read more about TCG here.
- You can read more about other Malaysian startups here.
Featured Image Credit: KC Cheah, Founder of Alpha Red Services / Flickr
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