The Indian Railways is a massive machine. One of the world’s largest employers with about 1.4 million employees, it has its own annual budget, its own union minister, and makes all the rules to run the 12,617 trains that move India’s billion-plus population.

Now, consider the scope and the fact that the Indian Railway Catering and Tourism Corporation (IRCTC), a partner to the Indian Railways which handles online ticketing operations, has a monopoly on bookings. More significantly, a monopoly on the sale of 284 million tickets a year. It’s no joke.

Given the scale, it comes as no surprise that it didn’t take internet companies too long to see the potential in these train-travelling users of the Indian Railways and IRCTC—a cohort of users often referred to as “the Next Billion Users”. Of the nearly 566 million with an internet connection only about 50 million, mostly urban Indians, shop online. The remaining, the Next Billion, evade the grasp of the internet commerce companies. But with 25 million people—a large part of whom make for the Next Billion—travelling by trains daily, internet companies see an opportunity in train bookings.

However, they must compete with the hand that feeds them—IRCTC. IRCTC launched online ticketing back in 2002, way before e-commerce went mainstream in India. Today, 66% of ticket bookings happen online. “People had their first brush with online payments using IRCTC. There is still a large number who have not bought anything else online but buy tickets online at IRCTC,” said a senior executive with an online travel aggregator (OTA), who did not want to speak about IRCTC publicly.

Not only is IRCTC competition to these players, but it also projects itself as almost invincible. “We don’t need them as much as they need us,” said a senior IRCTC executive rather bluntly, over the phone. ‘They’ being OTAs and payment apps, who have to contend with this hard reality if they want to partner with IRCTC and sell train tickets on their platforms. Essentially, IRCTC is a monopoly within another monopoly.

OTAs such as MakeMyTrip, Cleartrip, ixigo, GoIbibo, RailYatri and payment apps such as Paytm*, PhonePe and, most recently, Google Pay (and soon, Amazon Pay) allow their users to make train bookings. With almost 800,000 tickets booked online daily, it is a strategic category for these companies to drive transactions. In comparison, only about 400,000 domestic airline tickets are sold daily.

Despite their partnerships with IRCTC, internet companies have barely scratched the surface with ticketing. Over 75% of all online booking transactions take place on IRCTC’s own website and app (which has about 10 million downloads, with a 3-star rating on Android’s Play Store). The third parties—OTAs and payment apps—account for 10.6% of all the tickets sold for the year ended March 2018, said the IRCTC executive.


Arundhati Ramanathan

Arundhati is Bengaluru-based. She is interested in how people use money in the digital age and how new economies will take shape based on that interaction. She has spent over 10 years reporting and writing on various subjects. Previous stints were at Mint, Outlook Business and Reuters.

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