redBus.in figured in Amercian magazine FastCompany’s ‘The World’s 50 Most Innovative Companies’ list earlier this year. On Wednesday, redBus announced that it has sold tickets for over one crore bus seats in India.
redBus.in will remain focused on selling bus tickets over the next one to two years. Bus travel is growing 25 percent annually in India and the size of the bus travel market is estimated at over USD2 billion, according to a redBus.in media release.
The company has a four percent share of the overall market and the scope for bus ticketing is huge in India, Sama said. Future plans could see the firm add new product lines or tap international markets, he said. Excerpts from the interview:
We did INR300 crore in sales revenue in 2011-12 fiscal. We were at over INR100 crore in 2010-11.
Margins in bus ticketing are much lower than say margins in flight ticketing. We focused our energies on investing in technology and customer service from day one and waited to cross the (difficult) phase. The 2011-12 financial year was our first profitable year.
Once you cross the (difficult) phase, every ticket sold adds to your bottom-line because this is a fixed cost business.
We are clearly riding the first-mover advantage wave in India. Our call centres and other infrastructure were not very good in the initial (launch) phase. But even back then, in 2006, we were the best in the market.
Taking the right decisions such as adopting open source (software) solutions, finding the right real estate and moving to the ‘cloud’ have helped the company grow really fast.
There might be around 30 websites selling bus tickets in the country. But we are already selling thousands of tickets on a daily basis. We did not have any competition for about one-and-a-half years into the roll out of redBus.in, and that helped us.
Challenges facing the company…
The biggest threat at the moment is our own ability to scale up. We are expecting INR700 crore in revenues this year, which translates into the fact that we will be twice as big a company this year when compared to the previous fiscal. We need to scale up really fast in just 12 months and that is a major area of focus.
One of the possibilities could be tapping overseas Asian markets such as Nepal, Bangladesh or Malaysia, where bus transport is similar to what it is in India i.e. it is fragmented.
We might look at adding newer product lines such as hotel bookings or cab bookings.
These plans might require a fund infusion.