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.

Indian Bus Industry - An Overview Part 1.

Bus industry is one of the vital integral segments of Indian automobile industry. It is a common widespread public transport in India. The industry comprises of buses that are categorized into school buses, mini buses, tourist buses, deluxe buses, commuter buses and others depending on the use. Owing to the development of infrastructure and roads, connecting to remote places has become easier due to which more and more people are availing bus services. This has greatly contributed to the growth of bus industry. Proliferation of internet, rising income, online bus ticket search and booking, growth in low cost carriers, have further added to the growth of travel market in India

The first motor bus route started on July 15, 1926, and ran between Afghan Church and Crawford Market, Mumbai. The bus fare for the same journey was four annas, i.e 25 paise. Indian bus travel industry is a 15000 crores industry and growing annually at 25 %, with over 3,00,000 tickets sold daily, roughly making it an inventory worth $3bn.Indian bus market which was previously and at times still considered a very unorganized, fragmented and unregulated. However, now the market is slowing moving towards some uniformity and consolidation. Today, India has 5,000 private bus operators with a fleet size ranging from 5 to 500 buses.Indian bus market has revolutionized in the last 10-12 years,lot of changes have taken place in the functioning of the sector which is adding more convenience and comfort to the passengers. Indian bus market is divided into 4 broad categories

·         Mass market with bus ranging from Rs.22 lakh to 30 lakh. This market has the largest market share of over 60 %.  Rs. 22 lakh is for the non AC bus while an AC bus costs around Rs.30 lakh.

·         Value market with cost of the bus ranging from Rs.40 lakh to Rs.60 lakhs. Buses like ISUZU,Swaraj Mazda, MAN etc. occupy this segment and this segment has only 2 % market share.

·         Premium bus market is the market where bus range from Rs.80 lakh to a 1.2 crores. Volvo, Mercedes, Scania are the key players in this segment. This segment has a market share of around 25 % and it is this segment which is bringing about the changes in the industry.

·         Super premium bus market with cost of the bus from Rs.1.5 crores upwards. CLUB ONE, Olivia, SVLL connect form part of this segment and it occupies a niche market share of 1 %. The target group for this segment is the affluent class and people with deep pockets. Customers who prefer to travel in luxury.

The coming years will bring in consolidation, Lots of improvement and growth. The seeds of the future plants are being sown and good times lie ahead.