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.
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!