Indian Railways (IRCTC): Growing Leaps and Bounds

Indian railways' online booking portal IRCTC clocked estimated gross bookings worth INR 34 Billion for 2008-09, accounting for nearly 38% of total e-commerce market in India. Since its launch in August 2004, IRCTC has increased its share in total railways booking to 30%.

In the month of June '09, the website made bookings worth INR 4.3 Billion involving more than 5 million transactions. Of total value of transactions, credit card payment gateways accounted for the highest 31.4% share followed by debit card / net banking payment gateways with 30.8% share.

Within credit card payment gateways, ICICI gateway accounted for 54% share. Within debit card payment gateways, SBI accounted for 24% followed by ICICI Bank with 21% share.

Cash cards accounted for 25% share in IRCTC gross bookings; ITZ cash cards and Done card collectively accounted for 90% share in total cash card booking in June '09.

Online Travel Industry in India is on a Roll

The second most populated country in the world with rapidly increasing online population holds tremendous potential for online travel marketers.

Evolution

Since 2004-05, when low-cost carriers along with government led Indian Railways laid the foundation for online travel industry, there has been remarkable increase in the online travel activities in the country. Besides this, improvement in internet infrastructure, introduction of secured payment gateways and emergence of OTAs have acted as catalysts for growth of online travel industry in India.

Number of factors have also conspired to limit the growth of the industry such as, low credit card and internet penetration, relatively smaller aviation market and inadequate supply of hotel rooms.

Online Travel Sectors and Emergence of OTAs

Like any other evolving online travel markets, Indian online travel industry is predominantly driven by aviation sector. De-regulation of aviation sector in India, which saw emergence of several low-cost airlines will go in the history books of online travel industry in India. The initiative not only increased the competition amongst airlines but also compelled them to device successful online strategies for themselves.

Entry of Online Travel Agents has further intensified the competition in the online air travel industry and also presented online travel buyers with other travel products for online bookings such as hotels, car rental, buses and packages.

As industry is moving up the life-cycle curve, other products than airline tickets are gaining attention from both online marketer and online travelers. Leading OTAs are shifting their focus from airline to hotel rooms and have channelized their energies towards adding hotel room inventory to their portfolios.

OTA space in India is getting crowded with more than 20 OTAs competing for online travelers ' attention by luring them with lucrative offers and discounts. Backed by PE or VC funding, OTAs are leaving no store unturned to aggressively market their products and services and to increase their share in the online travel industry pie.

Conclusion

Considering all the growth drivers and challenges on the way, Indian online travel industry is poised for tremendous growth in coming years.