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Now Amazon And Flipkart Look To Tap Into IRCTC’s Database Of 21 Mn Users

Now Amazon And Flipkart Look To Tap Into IRCTC’s Database Of 21 Mn Users

While IRCTC has floated a tender to find a new player who could run the co-branded ecommerce marketplace, the existing ecommerce players have started working on getting a way out to tap the IRCTCs user base.

As reports suggests that both Amazon and homegrown Flipkart are in talks to sell their merchandise through IRCTC’s portal.

“Tie-ups with portals like Flipkart, Amazon etc are in the process under which these portals would like to sell their merchandise through IRCTC’s portal, it being one of the largest ecommerce sites in the entire Asia-Pacific region,” said Sandip Dutta, public relations manager at IRCTC.

IRCTC had entered into ecommerce almost a decade ago; it was the one which made people understand what ecommerce is all about in the country. The revenues which IRCTC earns today from its rail ticketing services, exceeds the total of what Flipkart and Amazon India have, if combined together.

On one side, both Flipkart and Amazon claims that they have hit an annual gross merchandise value of a billion dollar in the last financial year, on the other side, IRCTC earned revenues of about $2.5 Bn i.e. INR 15,410 Cr. through online sale of tickets which is almost up 24% from a year ago when it sold tickets worth INR12,419 Cr.

If we look at the profit and loss figures, IRCTC posted profit after tax of INR 72 Cr., Amazon in India reported net loss of INR 321 Cr. while Flipkart doubled losses to INR 400 Cr.

However, in spite of having phenomenal traffic on its portal, monopolistic position and higher sales, IRCTC still is not able to hit the valuation like VC funded companies like Flipkart or Amazon.

“Being a government company, its slow decision making, red tapism, less innovation leads to non interest by investors, which in turn leads to a lower valuation. Margins of travel are much lower than margins commanded by selling goods online too,” said Rakesh Nangia, founder and managing partner of Nangia & Co, a tax and transaction advisory firm.

Though IRCTCs previous ecommerce marketplace stint with Yebhi didn’t came out pretty well on its expectations and thus the contract wasn’t renewed, but still there is a lot more for it to leverage its existing database of more than 21 Mn consumers. Let’s see what IRCTC finally brings on table and whether the new partnership will come out on its expectations in a positive way or not.

Also Read: Flipkart & Yahoo Team Up To Launch A Co-Branded Marketplace

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