Online Bus Travel Industry in India

The bus travel industry in India is unorganized and highly fragmented. It is a 120 billion annual turnover industry with a growth rate of 25% per year. This industry is growing phenomenally in India, being one of the most preferred modes of transport for millions of Indians. There are around 2000 private bus operators which function with almost 20000 buses on point to point routes. In the Indian bus travel industry, most of the private players were regional players and did not have a pan India presence and therefore there was a lack of a centralized platform for organized scale of operations.

Despite of growth of online ticket reservations in India through renowned players like makemytrip.com (airline) and IRCTC.com (train), there was a reasonably slow growth when it came to online bus reservations. The role of IT in revenue management is prominently discussed by many researchers. The reasons for this slow growth could be attributed to several reasons like the unwillingness of the majority of the Indian population to book their bus tickets online, low internet penetration and more than that, the unavailability of a proper online platform to book their bus tickets.

The major challenge with the Indian bus ticketing industry is that despite of being used by millions of people it took a long period to witness some innovations in this sector. Moreover, within the travel industry it is noticed that the train and flight ticketing had centralized booking and reservation process implemented much earlier than bus travel industry. The bus operators are scattered across the country largely supported by conventional travel agents. There was an absolute need for transparency within the industry so that consumers can avail the services of a centralized system where they could be acquainted with the information regarding the total number of bus routes in operation, prices, availability, seat preferences, cancellations, refunds and feedback options.

E-ticketing or electronic ticketing in India is changing the landscape, especially air travel and railways ticketing coming a long way ahead. There are research studies which have discussed that service providers could increase their transactional efficiencies and expand their services by adopting modern IT in revenue management.

Growth Drivers of online travel industry in India:

 (i) Growth of Internet, (ii) Growth in Low-cost transportation option (iii) Secure payment mechanisms

Main Challenges:

 (i) Low margins and high operating costs (ii) Poor internet and credit card penetration

There are several players in this domain Redbus being the market leader, other players are Abhi bus, Simply Bus, Yatra.com and Bus Safar.com. With the redbus revolution, the potential in this arena is not out of sight. The competition in this business comes from basically travel agents and ticketing companies who have presence locally, nationally and few of those who even have an international presence. redbus over the years has adopted a business model which is quite difficult for the competitors to replicate due to which redbus is ahead in the contest.