The Indian Railway Catering & Tourism Corp (IRCTC) sold train tickets worth Rs 24,022 crore ($3.5 billion) online in the year ended March 2016, although growth halved to 17% from a year earlier as its customer base stagnated.
The government-owned portal, which gets a commission on each ticket sold, posted a 32% increase in revenue to Rs 1,506 crore, according to a filing with the Registrar of Companies. Its revenue come from service charge on tickets, sales of Rail Neer packaged water, onboard catering services and licence fees from outsourced catering vendors.
Just as with online marketplaces, the corporation's sales don't include actual goods sold and consist only of commission from sellers and revenue from advertisements on its ecommerce site. IRCTC's net profit grew 44% to Rs 189 crore.
"The base of people booking tickets hasn't increased as much as it did last year as the market has stagnated a little," said IRCTC Chairman AK Manocha. "Last year, we added huge capacity to absorb the pent-up demand. With better penetration of internet in rural market, we will have more users. It may not grow at 30% as it did in the last few years, but it would be strong growth anyway."
Manocha said IRCTC's revenue could double to Rs 3,000 crore by 2019. The company's contribution to the railways in the form of haulage charges, concession and licence fees, user charges and dividend, jumped more than sevenfold to Rs 396.46 crore.
India's internet market size will grow to $159 billion by 2020 from $16 billion now to emerge as the fastest-growing ecommerce market globally, a Morgan Stanley report estimates.
IRCTC says it is the largest e-commerce website in Asia-Pacific, with 15-18 million transactions a month and about 12 million visitors each month. IRCTC has tied up with non-rival companies seeking to tap the rail portal's 42.5 million users, with 15,000 being added every day on average.
The subsidiary of the Indian Railways is looking to monetise segments such as packaged water and catering. The Rail Neer business generated Rs 118.48 crore, while the catering department made Rs 255.5 crore for IRCTC.
"The demand at railway stations is over 100 crore bottles of one-litre packs but we are able to supply only 20 crore bottles. With more plants in the pipeline, we can sell the brand outside stations as well. Also, from 40-50 trains we plan to cover 1,000 trains and set up 75 base kitchens in terms of catering to target Rs 1,000 crore revenue only just on-board catering services," Manocha said.