Cybercafes as a tickets distribution channel

Written by: Madhur

On Sep 25th, 2006

There was a news last week regarding the tie up between Sify and IRCTC. The deal mentions that customers can book railway tickets by paying cash at the Sify Iway locations. This will definitely open a new chapter in the way tickets are sold/distributed. Considering that currently the total revenue from online ticketing for Indian Railways roughly stands at a paltry 2%, the room for growth is huge. At the present time, the only way of booking tickets online is through IRCTC website. With this deal two major barriers are broken:

1. Internet access: Even if you choose the best sounding statistic of 37 million internet users (I say “best sounding” because the number of pepole who actually use the Internet at least once a week is just under 10 million), there are lot more people who are trying to book tickets. Going to cybercafe and paying cash to book ticket is just like going to a travel agent. This essentially means many more railway tickets “travel agents” at standardised rates. Couldn’t get better for customers!

2. Mode of payment: The IRCTC site accepts payment in the form of credit card or net banking facility, which is a major blocker for large number of Indian customers. A data from recently concluded IAMAI conference suggests that credit card bankable population is only 0.03% (add some such small figure for “net-bankable” population.) So its not surprising that number of customers using the site is only 25,000.

Lets see what gates could this deal open:
1. The deal does not mention that it is exclusive. So there could be more deals coming with Reliance Webworld and others.
2. The time may not be far when airlines also start using the cybercafe channel for ticket sales. Especially, budget airlines like AirDeccan which rely completely on web based bookings will need to find more distribution channels like this as they expand more.
3. In fact, this is an excellent channel for any other service that requires tickets sales. If I were to think of implementing a Fandango in India, this is surely one of the channels that I would use.

Currently there are around 3,300 Sify Iway’s in around 150 cities. The next step is probably to cut a deal with Reliance Webworld who have around 240 outlets in 150 cities. A bigger challenge (of course to get much more penetration) is to actually use hundreds of thousands of small standalone cybercafes spread all over India as distribution channels.

Sphere: Related Content

Entry Filed under: ecommerce,infrastructure

7 Responses

  1. 1. Pawan Agarwal said on October 1st, 2006 at 8:17 pm

    The credit card penetration in India is limited, many users(many out of the 10m online power users) are afraid of making online payments, so these are just some not so obvious reasons why “Assisted Internet” is the emerging supporting model for consumer internet in India (1. All job portals have such centers 2. Matrimony sites have such centres run by franchisees 3. Online ticketing had to take this route). Is someone also thinking of something similar in retail? .. I beleive I heard of some one working on such thing, but didn’t pick up.

  2. 2. Madhur said on October 1st, 2006 at 9:19 pm

    The closest I’ve heard is that Sify is planning to brand their cyber cafes as “e-commerce” centers where people can just do all kinds of online trasactions without having to have a credit card.

  3. 3. iLeher » Project Saksham - Internet PCO- All about Internet industry in India said on October 3rd, 2006 at 6:51 am

    […] I think if the project is executed to the plan, it can bring about a revolution in terms of computer literacy, internet penetration and source of information for common man. Literacy should not be a problem even in small villages as it will not take much time for application and web services providers to come up with apps in localized languages and native look and feel (Companies like Yahoo are already taking a step towards that). Once that happens, the possibilities are endless. For a common villager, it can provide advanced weather information, news, tips of the trade for different businesses and jobs in urban areas. Ecommerce applications like online bill pay, online ticketing, ordering things not available locally can greatly enhance quality of life. For students it can be a source of education, finding information about Universities, career opportunities etc. This will obviously be a great boost for the Internet ecosystem in India. […]

  4. 4. Santosh said on October 16th, 2006 at 3:11 am

    — quote
    2. The time may not be far when airlines also start using the cybercafe channel for ticket sales. Especially, budget airlines like AirDeccan which rely completely on web based bookings will need to find more distribution channels like this as they expand more.
    — end quote

    Isn’t Air Deccan already with Reliance Web World? I don’t have a link handy but I have heard that they tied up.

    – Santosh

  5. 5. Madhur said on October 16th, 2006 at 6:54 am

    Santosh, thats good to know. I guess my speculation was correct then!

  6. 6. Santosh said on October 25th, 2006 at 2:20 am

    Here is a small note on the Air Deccan site – Air Deccan is with 104 Reliance Web World Cafes in India.

  7. 7. Madhur said on October 25th, 2006 at 4:41 am

    Good info Santosh.

Comments are closed.