MUMBAI: Revenue from online ticketing on Indian Railway Catering and Tourism Corp crossed the Rs 20,000-crore mark during the year to March 2015, nearly double the turnover of India’s largest online retailer Flipkart. IRCTC generated Rs 20,620 crore, or nearly $3 billion, through online ticket sales in the last financial year, up 34% from a year ago when it sold tickets worth Rs 15,410 crore.
But unlike loss-making marketplaces, IRCTC posted profit after tax of Rs 130 crore, up from Rs 72 crore in the previous year. “Bulk of the sales may be attributed to IRCTC’ s rapid growth in e-ticketing which has been due to its interface and setting up of a very robust process. Capacity enhancement was done to book 7,200 tickets per minute as against 2,000 tickets per minute in the existing system,” said Sandip Dutta, public relations manager at IRCTC, which set a record in April when it booked 13.4 lakh e tickets on a single day. That compares with 27 tickets a day when it began in 2002. In fact, 55 per cent of all rail tickets sold are booked online.
The government-owned portal posted a 19% increase in income at Rs 1,141 crore, which mainly includes service charges on tickets, sales of Rail Neer water, on board catering services and license fees from outsourced catering vendors.
This is similar to online marketplaces where sales don’t include actual goods sold but instead count commission from sellers and revenue from advertisements on their e commerce sites. IRCTC’ s combined income from commissions on ticketing, travel and tourism was Rs 670 crore, a tad higher than Flipkart’ s turnover of Rs 659 crore earned from shipping fee and selling commission on its e-commerce portal.
By having a monopolistic position, higher web traffic and sales, IRCTC can attract several brands on its portal, feel experts. “A large part of the Indian population trusts IRCTC and brands across consumer, food and tourism can use it to advertise or sell their products on the portal,” said Devangshu Dutta, chief executive at retail consultancy Third Eyesight.
Since IRCTC doesn’t compete with any of the online marketplaces in India, Amazon has partnered the rail portal for two years with an annual guarantee of Rs 18 crore a year. India’s e commerce market is expected to breach the $100-billion mark by FY20, triggered by increasing internet usage, discounting and investment by online retailers, according to Goldman Sachs that has revised its previous estimate. The majority of an upward revision of 27 per cent is contributed by the e-tail segment, which is estimated to reach $69 billion by FY20.