Indian Railways Selects Sify for eTicketing

Indian Railways has selected Sify to provide online ticketing for IRCTC through Sify’s iWay chain of 3400 cybercafés across 154 cities. A pilot project has been launched in Delhi with 10 iWays and the final launch schedule is expected in Q1 2007. Rail travel is a big industry in India. The state run Indian Railways has a monopoly on rail travel in India transporting about 5 billion passengers every year. Due to the heavy demand for rail travel, ticketing has always been a cumbersome activity which entailed long waits in serpentine lines to reach a booking agent at the reservation center, as has been the author's experience in the past. Under this scenario, the value proposition for an online reservation system was simple and compelling, which led to the IRCTC ecommerce portal becoming the largest in Asia. Currently there are more than 1 million transacting users on the site, which handles more than 13,000 transactions every day. The site accounts for 1-2% of total rail tickets sold and this is expected to reach 10% of tickets sold in 2-3 years. With 3400 iWays in 154 cities (and growing), Sify owns the largest number of branded storefronts in India, providing it significant reach into smaller towns and cities. With a cybercafe within easy reach of millions of Indians, Sify has the opportunity to leverage the potential and significantly increase the monetization of its cafés. According to IRCTC, 31% of online tickets booked at their site are from non-metro cities, and about 47% are for non-premium seating (i.e., non air-conditioned coaches). This is a good illustration of the latent demand for online booking from small towns and across socio-economic classes. Additionally, travelers can pay cash for the ticket at the cybercafé and the supervisor will swipe a credit card to enable to transaction—this will circumvent the problem of low credit card and Internet banking penetration in India, which has been a bottleneck for ecommerce growth. Travelers will also be able to receive a printout of the tickets immediately. However, before a full scale launch, Sify will need to introduce training exercises for its franchisees, put systems and procedures in place and develop a marketing plan to target the population close to the cafés.
Thanks KAUFMAN BROS. RESEARCH, 2006.