From food and online tickets at present, to books, footwear and mobile phones in future – the Indian Railways Catering and Tourism Corporation (IRCTC) plans to spread its wings far and wide.
“We are discussing with existing firms in the e-commerce space to thrash out the details. This will help us monetise our registered user base of over two crore,” IRCTC Managing Director R.K. Tandon told Business Line.
The Railway Ministry’s arm, which may also start selling furnishings and electronics, will plan out online shopping activity in a manner which ensures that online ticketing traffic does not get affected, Tandon said.
“Even now, our system capacity is free during the large part of the day, barring peak hours. And now that we will invest in further upgrading the IT infrastructure, we would like to increase asset utilisation to earn more revenue on the same costs,” he added.
To enter the online retail space, IRCTC is following the white-label model, which basically means back-end jobs will be outsourced to another firm, while the front-end ones will be owned by IRCTC. This is the same model that it followed when it diversified into hotel booking and flight ticket booking services.
Now, it has invited qualifying bids from companies in the e-commerce space for building and managing the platform.
Broadly, the proposal is that IRCTC will pay the players different levels of commission based on the total value of sales achieved on the website. The commission will go down once sales value goes up.
In a related move, IRCTC plans to spend Rs 90-100 crore to increase transaction capacity of its website, said Tandon.
Taking note of the delays in booking train tickets online at IRCTC’s website, Railway Minister, Pawan Bansal had announced that by this year-end, the capacity will be upgraded to support 72,000 tickets a minute, from the current level of 2,000 tickets a minute. The upgradation will also support 1.2 lakh simultaneous transactions, thrice the current capacity.