Umroh - a huge industry that keeps getting bigger
Umroh — some spell it as ‘umrah’ — is Islamic pilgrimage to Kabah in Mecca. It’s also called “little hajj” as some of routines are similar with what being performed during hajj. The other difference is hajj can only be conducted during a certain dates in a year, while umroh can practically be done anytime — outside the hajj period.
Millions of muslim perform umroh every year from all over the world. Last year alone Indonesia sent 1 million umroh pilgrimage and we are not even the biggest country to do so — even though we are the biggest muslim population in the world. No quota set for umroh, what keeps it in that volume is the infrastructure — direct flight to Kingdom of Saudi Arabia (KSA), hotels nearby the great mosques and capacity of Masjidil Haram — mosque of Kabah. KSA has worked really hard to increase the numbers of hotels and more direct flights from muslim countries to Jeddah or Madinah, and capacity of Masjidil Haram in the last few years. So we can expect the travelling pilgrimage numbers will soar in the near future.
As stated above, in 2018, Indonesia flew 1 million pilgrimages to perform Umroh. This year the number is expected to increase by 20%. In the last few years we see an encouraging incremental in the number of pilgrimages, as seen in below chart :
There are a few reasons we can draw from this :
1. Continuous growth of GDP per capita that leads to increased of buying power of Indonesians
2. The waiting list to go to hajj is getting longer. I will explain this a bit below.
One of the mandatory for muslim is performing hajj at least once in their lifetime, if one financial and health condition permits. There are 236 million of Muslim in Indonesia, and the quota for hajj is only 220 thousands per year. So people have to wait to go to hajj. On average for regular hajj, muslim in Indonesia must wait around 20 years after they submit the first payment for hajj. Yes you read it right, 20 years!!! So if you today decide to go and submit first payment, most likely you can eventually go hajj by 2039. You will wish you are still in good shape 20 years from now then.
So people usually decide to go Umrah, while waiting for their turn to go hajj. Unlike Hajj, Umroh is not mandatory and can be done anytime of the year. And some routines of hajj also being performed in umroh. Their ultimate goal is still hajj, but at least they can go umroh today.
Umroh industry in Indonesia has been existed for many years. It’s a big industry. Not less than $1.8 Billion per year industry. Umroh packages are sold by specialized Travel Agents. Government regulate the industry by setting up rules that must be complied by Travel Agents. There are more than 1000 agents officially licensed to sell umroh packages. There were a few fraud cases happened in the last few years where people already paid for the package but Travel Agents failed to fly them due to mismanagement and went bankrupt, therefore government — via the Ministry of Religious Affair have released the new set of order in order to avoid such issues happen again.
How people find and purchase umroh packages is mostly done conventionally. Travel Agents set up offline stores where people can go to or have individual resellers to sell the package from that particular Travel Agent. Most of the time people buy via these resellers and transfer the payment either directly to Travel Agents being represented by them or to the resellers first, then later on the payment is passed through to Travel Agents (It’s pretty straight forward model, I hope I don’t make it confusing to you with this explanation though…).
We spotted a few things that can be improved. Don’t get me wrong, the current offline way — via resellers and all — has already proven to be working. We just see something that we can add via digital platform that can improve greatly in customers experience, transparency and adding convenience in the process.
In an era when people obsessively search to find out for things they want to purchase online, familiar with platform like TripAdvisor and Traveloka for travel-related experience, and already trust the online payment for financial settlement for digital purchase, we introduced pergiumroh.com as a digital platform for umroh purchasing. These customers that we are targeting is known as hard to please, as they already have experience in ecommerce and online marketplace. There are expectations that we have to meet. What they will get, is not only transparency but also simplicity in the process. So instead of going to travel agents or resellers, pergiumroh.com let users to choose hundreds of packages from many Travel Agents from the palm of their hands.
We launched pergiumroh.com end of July 2018. And we are very happy with the reception we are getting so far, in terms of traffic, awareness and transaction. It’s considered a new marketplace category in the existing offline market, so daily improvement is a must for us. We have to introduce new feature every month now to keep up with customer’s expectation. But it’s a good thing. That just validated our initial thought, that people are expecting this — digital umroh purchasing.
And form where we are seeing, we are going in the right direction. Digitalization of umroh purchasing is happening and we are glad to be at the heart of it when it happens.
