Here is a surprise: One of the largest e-commerce sites in India is run by the government-owned Indian Railways Catering and Tourism Corporation (IRCTC).
www.irctc.co.in, the online rail ticket reservation site, is doing transactions averaging Rs 40 lakh a day. Around 2,500 tickets are booked, printed and dispatched daily to 29 destinations. And it is growing by 25 per cent a month, says IRCTC deputy general manager of operations J Vinayan. “We are the fastest growing credit card-based e-commerce site in the Asia-Pacific region.”
| E-commerce suite: E-commerce solutions allows you to trade online with customers. What e-commerce really does is that it puts in place a range of modules to suit your specific business situation. Each solution varies in its level of functionality. For instance, an e-commerce could start with WebCat, a simple facility for displaying your product catalogue over the Internet. |
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Payment Gateway: This is basically operated by a third-party provider. A gateway system processes merchant payments by providing an interface between your e- commerce Website and the acquirers financial processing system.
There is potential to grow faster than that. Bulk and corporate bookings are yet to be allowed on the site; neither are travel agents. The entire business is coming through individual bookings. “We are examining how to permit corporate bookings. We will have to ensure that our systems can handle such huge transactions. There will have to be some changes in the software ,” says IRCTC group general manager Vinod Asthana.
Even the scope of growth through individual bookings is vast. Says Mr Vinayan, “Indian Railways does 4.5 lakh bookings a day. An online booking of 2500 tickets is not even one drop in the ocean.”
The second surprise is that even with the current rate of growth, irctc.co.in can break even only after six and a half years. The reason: it charges Rs 30 for a second class ticket and Rs 50 for upper class tickets. “The commission is too low. And we charge per ticket, not per passenger. If we price the tickets at Rs 75 and Rs 100 for the two categories, we will be able to break even in one year. But we have a social role too,” says Mr Vinayan.
Customers have to pay an additional 1.8 per cent to the payment gateway, the bank issuing credit card and Master and Visa organisations with whom IRCTC has tied up. “They wanted to charge 2.25 per cent but we restricted them to 1.8 per cent,” says Mr Vinayan.
IRCTC is playing the volumes game. The site can handle 10,000 tickets under the current server capacity which is installed in Delhi. But there are two infrastructure bottlenecks: a single payment gateway and the bandwidth of 1.5 mbps. With daily ticket sales expected to touch 8,000 by December 2003, IRCTC is planning to strengthen its infrastructure. Though it has a tie-up with ICICI payment gateway, an exercise is on to integrate it with the Citibank gateway soon. The corporation will also acquire additional bandwidth to upgrade it to 2 mbps within two months.
Plans are on to widen the user base. The online booking facility is set to be extended to cover debit cards and Internet banking users. Currently, it is being allowed only to those individuals who have credit cards. “We are widening the acceptability of users,” says Mr Asthana. Soon Diner’s Club and Citibank debit cards will be accepted. Direct account debits will also be allowed.
To step up volumes, IRCTC plans to have a printing location in Mumbai by the end of the year. By installing a server in Mumbai, the capacity to handle tickets would increase by 5,000-6,000 a day. The next printing location will be set up in Chennai to cater to the southern market. Currently, printing is done only in Delhi and tickets are delivered by courier. “Mumbai does an average of 1,000 tickets a day for us. We need a printing location there. Delivery in the southern region will be from Chennai, once we set up a facility there,” says Mr Vinayan.
Handling such large-scale operations will require a strong security system. IRCTC uses three layers of firewalls. When a query comes from the Internet, it passes through the first firewall; it then enters the server through a firewall; the third firewall is between the server and the main computerised reservation system.
Credit card data is 128-bit encrypted. Tickets are booked on encrypted mode and the credit card numbers are not available to IRCTC. The credit card issuing authority sends to IRCTC a confirmation through the Internet system. IRCTC has invested Rs 5 crore in setting up the site. The software has been developed by Broadvision which also maintains the site. The backend is looked after by the Centre for Railway Information System (CRIS). The site is certified by Verisign. “Broadvision has developed the e-commerce suite. The system is linear and scalable,” says Mr Vinayan.
IRCTC accepts only Master and Visa cards now, but plans to extend that facility to other users to widen the base. While only individual bookings are allowed to those who have credit cards, transactions beyond a certain number are barred. A single user ID is issued four tickets a month. A customer can book a maximum of six seats per ticket. Concessional tickets are not allowed online except in case of concessions to senior citizens and children. “Wherever vouchers are needed, online booking is not permitted. Passes will need verification at the counter. Handicapped and cancer patients can’t book online,” says Mr Asthana.
After registering on the site, a customer’s history of transactions is recorded. Customers can access the whole database on the site: time tables, PNR status, availability of reservations, concessions and tourist locations. Once the passenger selects the train and class, the price of the ticket is shown. Bookings are from 8 AM-10 PM on weekdays. The customer is intimated on e-mail about the confirmation of the ticket. Cancellations cannot be done online. But the refund goes through the payment gateway and the amount is automatically added to the customer’s credit card balance a day after the ticket is cancelled.
The ticket is delivered by courier within three days at 29 destinations. Agra will become the 30th destination from April 11. Some locations are included because of political reasons. Patna, for instance, does two tickets a day. But railway minister Nitish Kumar hails from Bihar. IRCTC, however, may decide to freeze its service after 40 towns are covered.
Courier support is provided by AFL/WIZZ. The customer can know the status of delivery of the ticket through a link on IRCTC’s home page to a consignment tracking page managed by AFL/WIZZ.
What does the data analysis on online bookings show? Premium trains like Rajdhani Express account for 50 per cent of the online bookings. Second class tickets comprise 52 per cent of the total online bookings. About 65 per cent of bookings are done from offices. Females account for 16 per cent of the bookings, says Mr Vinayan.