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IRCTC to sell books, mobile phones online!

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IRCTC, the online train ticket booking portal of Indian Railways is diversifying into ecommerce space according to Business Line report. The portal will sell books and mobile phones to start off and later extend the offerings to home furnishings and electronics.

IRCTC plans to do this via partnership with Indian ecommerce sites and according to IRCTC MD’s statement they are currently discussing the modalities with various ecommerce portals. IRCTC will only act as a front-end and all the inventory and logistics part will be handled by ecommerce sites they have partnered with. [source]

Why is IRCTC venturing into Ecommerce space?

IRCTC is one of the most trafficked website in India and largest online ticket booking portal by a large margin – It has over 2 crores registered users. IRCTC wants to make sure that they take advantage of such a large user base and increase average revenue per user.

Also, majority of users who come to IRCTC are non-regular users of Internet and for them IRCTC is the site they trust. They make online payments for tickets and would not mind paying for products and deals that are featured on IRCTC website.

Although, it is not clear who will accept the payments from users, my guess is that payments will be handled by IRCTC itself, because registered users will be comfortable paying on IRCTC rather than 3rd party website that they are not aware of. IRCTC will then pay the ecommerce partners depending on the sales made on the website.

From infrastructure perspective as well, IRCTC has lot of spare capacity during non-peak hours and offering products online will increase the utilization without increase in cost and adding more revenue.

IRCTC website

Currently, IRCTC accepts display advertising (as shown above in the screenshot), but impression based advertising does not yield too much of revenue. With entry into E-Commerce, even if small fraction of users buy products from IRCTC, the revenue yield will be much higher.

What really needs to be seen closely is how IRCTC will partners with various ecommerce sites – Whether it will be as simple as IRCTC being an affiliate to them or will the integration be more deeper level…. Lets wait and watch!

Would love to hear your thoughts on this!

  1. Sandeep says

    Great if IRCTC comes into ecommerce domain. We shall all see a website gone from worse to worst.

  2. Ranjan Rajgopaul says

    The IRCTC website usually does not work. Paying online is painful but you get to that stage on irctc only after much headache. So the article suggests they are going to take an already bad site and make it worse :)

  3. Altaf says

    I have another idea for Railways.
    We all know that IRCTC is set up by Railways. Railways owns IRCTC 100%. In other words, Railways created a seperate entity to look after a specific work for it.
    Let Railways monetize it.
    Like Reliance Infra separately floated Reliance Power to look after its Power business and later monetized it.
    Let Railways go to some Consultant and let them estimate the net worth of IRCTC.
    Then let Railways make an IPO for lets say 25% of the stock at a premium.
    This will help make IRCTC a corporation in itself while Railways gets money from IPO.
    We all can see transparency in the operations of IRCTC. Share price is its measure of success.

    Another two paisa :)
    I know people will say these two paise are khote sikke :)

  4. Partha says

    I do not support the concept of promoting e-Commerce on Govt. sites, particularly those like the IRCTC web site which has been primarily setup to take care of travelers needs. No doubt this site being most visited and trusted it becomes an automatic choice for further commerce but the flip side is that it leads to dilution of focus as desired from ticketing, queries and related information dissemination.

    As the Railway authorities start getting more revenue through the e-Commerce route, obviously there will be a desire to earn even more and soon there would be targets set on the IT department to be met periodically. This will divert their focus from the mail objectives of the IRCTC web site.

    Moreover even if IRCTC really want to promote e-Commerce on their web site, they should probably help improve small time cottage industry businesses expand their reach and presence. Rather than further helping those corporate businesses which are already raking lots of revenue.

    And last but not the least, the increase in transaction traffic on the IRCTC web site due to e-Commerce will impact genuine ticketing customers causing unnecessary break in transactions, frustrations and sometimes lost money during online payments. Is this really necessary?

    1. Arun Prabhudesai says

      @partha Good point of view… However, I do not agree that they will loose focus from ticketing. Even the Railways MD stressed on the point that they will always primarily be a ticketing portal and that will be the focus. And good part that IRCTC is doing is that they are giving off entire back office work their eCommerce partners…they are not going to it themselves. For them it is just matter of setting it up on the front-end and then there is not much to do for them.

      I agree on the fact that they should promote cottage Industries… but again if IRCTC decides to do that, it will have to create an end to end solution, which will then be an issue…because then they will loose focus from ticketing.

      According to the budget, they are planning to upgrade their infrastructure which will support 5 times more users than what they have now…so I do not think infrastructure should be a problem.

      1. Partha says

        Arun, I sometimes wonder if Govt. websites/offices putting up advertisement hoardings/banners is legally allowed? After all they are paid through tax payers money and are mainly supposed to be serving the public.

        If you look at the IRCTC website, for a novice it is so confusing that one may not even know where to start. The UI is so bad that “it couldn’t be worse”. Even if someone if able to get into inner pages, the final “Book Now” link is so obscure and hidden between tables that again it is a real pain to locate and take the transaction forward. And under these horrible conditions if you add advertisements that further disturb, distract and delay page loading etc., god only can save the poor citizen. No wonder now even online ticketing counters are thriving all over.

  5. Altaf says

    Though not related (IRCTC), I would like to put my idea here which will be relevant to Railways.

    Has any one ever wondered which places are the most crowded areas in India? Its Railway Stations bulging with floating population.

    Have you wondered in Railway Stations which areas are even more crowded areas? Its the food stalls / canteens. As soon as a train arrives, people trying to get a bottle of water or trying to grab a snack or a meal if time allows.

    Now I was wondering why any one has not thought about putting up Mc Donalds, KFCs, Pizza Huts, Burger Kings, Subways in Railway Stations?

    First of all, they provide more hygenic food than any of the cleanest canteens. People wont mind paying a little more for Branded fast food.

    Railways would be doing itself a favor by renting out commercial space at higher rates to them and doing a favor to increasing the fast food business and doing a favor to travellers by giving them an added place to choose food from.

    Note : This formula works only in Railway stations which have well defined areas inside Railway stations. In But stations, it is usually shortage of real estate area and hapahazardous arrangement of stalls all kinds of vehicles travelling everywhere and will not work.

    Just my two paisa :

    1. Arun Prabhudesai says

      @altaf as usual a great thought…and something to think about. However, putting up McDonalds and KFC at Railway stations will be difficult. However, out of thousands of stations in India… there are probably fewer than 10 railways stations that will have a space to accommodate these fast food outlets. One problem is the space crunch, and more than that it is also the consumers… 95 percent consumers will not be able to afford a Rs. 100 burger from McDonalds…or KFC. I guess that is the reason we see Rs. 10 vadapav stalls on stations and not Rs. 100 burger joints…
      Just my thoughts..

      1. Altaf says

        Today I filled petrol in a Station which also houses a Mc Donalds. Remembering your comment about space constraints, I got down from my car and walked around the area. It is about 15 feet wide by 35 or 40 feet long including their stores, and window to take orders from passing cars, toilet. Seating is small with 4 tables. (What else can I expect in a Petrol Station other than 4 tables)

        The point is in any railway station, the platforms are wider than 15 feet. Length is not a problem. Only they have to decide and start one fast food center. The fast food centers will design their own sleek outlets to fit.

        Agreed that 95% can not afford Rs.100 for a bite of a burger. But mostly during travel, people are more cautious to eat hygenic food. I remember falling sick after eating in Railway stations and how my parents never allowed us to eat anything (we used to carry even our water and food prepared at home, fruits to travel from Vijayawada to Hyderabad a 6 hrs journey)
        In Maharashtra itself there are more than 10 stations like Pune, Nashik, Nagpur (I am not counting Mumbai as it is a starting point or ending point of the journey). In India there are atleast 100 stations.
        We can start with at least one or two places and see the response.

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