August 17, 2011
In India, most of us have grown up to the concept that anything that is Government-owned or Government-run leaves a lot to be desired. We have it ingrained into our psyche that Government heritage, projects and initiatives will be unkempt, scam-ridden and occasionally, even defunct. It is in this backdrop that state-owned or backed endeavours like Delhi Metro and IRCTC come as a whiff of fresh air.
The Indian Railway Catering and Tourism Corporation Limited (IRCTC) is not just India’s but also Asia Pacific’s largest e-commerce portal. And this is...
more... not a mere squat; IRCTC has been firmly perched at the top for the past many years. When it was launched in 2002, the Railways’ online ticketing portal saw just 27 tickets booked on day 1 and 3,343 tickets in the first month. Today, with 8.4 million visitors in April 2011, IRCTC comprises 45% of all visitors to travel websites in India and 19% of total Internet audience.
Factors that contributed to the success of IRCTC
The IRCTC success story is undoubtedly an inspiration for the entire generation of e-commerce portals in India. However, behind this success story is a firmed up business plan as well as a near flawless execution till the recent past. Here are some of the reasons why IRCTC became a darling of train travellers in India.
Cheap and convenient - Online booking was a revolutionary concept back in 2002. People in not just tier 2 and 3 towns but also in metros like Delhi and Mumbai were in for the shock of their lives to see tickets neatly tucked in Overnight Express envelopes for a ridiculously low service charge. At Rs. 8/- per person for a booking of a family of 5, even the relatively lower classes did not mind paying for the convenience of tickets being delivered at the doorstep.
Quick and efficient last mile connectivity - It is notable to add that IRCTC’s policy of awarding the delivery contract to only one courier company has been a masterstroke. It gives more control to IRCTC over delivery, with just a single channel of communication to take care of. The delivery happens within 24 hours in Delhi and Mumbai where tickets are printed. For other parts of the country, the upper limit is three days!
Easy to navigate web interface - The website lays down all possible options, allows one to customize his or her train options based on start and end stations, desired dates, routes and possible fare classes. The interface also allows one to keep a record of all past bookings, cancellations and upcoming trips. Arguably, the interface is not Apple-esque but it serves the purpose well. All this, without feeling like Alice in Wonderland at the ticket booking counters!
The success of IRCTC becomes doubly impactful when you consider that it is the marketing arm of Indian Railways – the world’s largest employer that also transports a mind-boggling 6 billion passengers annually! To provide a simple, easy to use interface that can support 35,000+ unique visitors during peak hours and ensuring that every single ticket reaches the consumer in remote locations across the country is no mean feat. Add to it, the highly secure payment gateways (the site is VeriSign certified) with more than ten options of using credit and debit cards, and you have a safe, hassle-free platform.
Concerns
The future, however, may not be as rosy for IRCTC. It is besotted with a plethora of crippling problems arising, ironically, because of what was its very strength – a large captive base!
The website, in its current state, will soon become ill-equipped to handle 16 million users who book about 9 million tickets every month online. About 40% of these are booked during the morning hours (8 AM IST to 10 AM IST approx).
As a result, in Jan 2011 alone, there were more than 2.9 million failed transactions translating to a humungous 25% fail rate. To add to the woes, failed login attempts and other request failures only goes to show that something is really amiss here!
Announcing the Railways budget 2011, Railways Minister Mamata Banerjee launched a portal for e-ticketing from the Centre for Railway Information Systems (CRIS). The decision is primarily driven by IRCTC’s lack of support & infrastructure failure. This probably explains why IRCTC forayed into air travel booking – it was trying to hedge its risk!
This is the second major blow to IRCTC in two successive years. In Railways Budget 2010, a catering contract was taken away from IRCTC. A recent comment from the MD, Rakesh Tandon sums it all: “This year will be a tough year. Catering and e-ticketing have been our main source of income. With a catering business worth Rs 300 crore gone, we are already feeling the pinch. Now, the new portal will cut our share in ticketing too”
IRCTC, over the years, has been receiving several complaints of malpractices. As a result, it recently deactivated IDs of 1.4 million users suspected to be indulging in such practices. Rail tickets are always in high demand but they're hardly available because of corporate bookings and a nexus between agents and fringe employees. To counter this systemic problem IRCTC has now barred authorized agents from booking e-tickets. Additionally, these agents have also been banned from purchasing Tatkal tickets before the first 1 hour (8AM – 9AM) to give fair chance to the general public. It has licensed 100 principal agents in India who in turn, appointed sub agents working as authorised ticket agents.
Future
Problems notwithstanding, IRCTC is the unquestionable showpiece of the Indian Railways. It has the absolute potential to overcome all of its problems and continue to dominate the online booking space. With additions such as flight, hotel and cab booking as well as booking packages, IRCTC may well become a competitor to the more established travel portals like Cleartrip, Makemytrip, Yatra, Meru and Easycab soon. However, this being a different segment, IRCTC will definitely need to significantly up its interface and usability to break into this slightly more elite market. Moreover, it needs to realize one thing: air, hotel and cab bookings are only ancillary revenue categories. It does not have any USP there. Its core competency is, and will remain, train booking.
