IRCTC to enter online retail market [Will it work?]

India’s railway ticketing site will soon be selling more than just railway tickets. The Indian Railway Catering Tourism Corporation (IRCTC) is gearing up to take on a larger chunk of the growing online retail business by selling mobile phones, books, footwear and other merchendise online, according to a new report.

The government owned online ticketing portal will follow white-label model, in which back-end jobs will be outsourced, and the front-end operation will be executed by IRCTC, reports The Hindu Business Line. The model would be similar to its hotel booking and flight ticket booking services.

IRCTC Managing Director R.K. Tandon mentions that “we are discussing with existing firms in the ecommerce space to thrash out the details. This will help us monetise our registered user base of over two crore.” (source)

To foray into etail market, the ticketing site has already invited bids from companies to build and manage its upcoming retail platform. For managing its etailing platform – IRCTC will pay commission based on the total value of sales achieved on the website. The commission will go down as sales value goes up.

Why IRCTC is doing this?

Recently while presenting railway budget government proposed a major overhaul to support booking of three times more number of tickets per minute and 6 times more number of simultaneous users. IRCTC will invest around Rs 100 crores to upgrade its existing infrastructure and retailing would be a viable option for IRCTC to monetize the infrastructure cost.

Nearly 4 lakh tickets are booked on the site everyday. The website works alright for most parts of the day but gets extremely tardy during peak hours, especially when people are trying to book tatkal tickets. For the rest of the day, the site usually runs lean and it wouldn’t be a bad idea to monetise the idle infrastructure.

What are your thoughts on IRCTC’s latest move?

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