A recent analysis conducted by VIDEC under the title “India Ground Transportation Market Sizing & OTA Benchmarking Study, FY20-FY26″ has unveiled the notable developments within the travel market.
The findings have highlighted ixigo Group, which includes subsidiaries ConfirmTkt and Abhibus, as the second-largest online travel agency (OTA) by revenue in India for both fiscal years 2022 and 2023. ixigo has further solidified its presence in the business-to-consumer (B2C) rail sector, attaining an impressive market share of almost 50 per cent in terms of Gross Booking Value (GBV) within the B2C rail market for the fiscal year 2023.
The report stated that this data underscores ixigo’s continued ascendancy within the industry.
The study forecasts significant growth in the Indian online travel market, driven primarily by the train and intercity bus segments.
According to the study, ixigo Group has solidified its position as the second-largest OTA in the bus sector, capturing an 11 per cent market share by GBV during the fiscal year 2023. This achievement positions the company as a preeminent travel platform catering to the burgeoning user base in India.
VIDEC’s latest research underscored the enduring prominence of Indian Railways as the country’s foremost mode of transportation, boasting a substantial market size of nearly INR 617 billion (USD 7.7 billion). Notably, the online B2C channel for rail bookings is anticipated to witness a remarkable 23 per cent Compound Annual Growth Rate (CAGR), surging from INR 95 billion in fiscal year 2023 to a projected INR 176 billion (USD 2.2 billion) by fiscal year 2026, thereby constituting a noteworthy 26 per cent of the overall rail bookings market.
Additionally, the study foresees rapid expansion within the bus travel segment. With increased investments in national and state highways, augmented internet accessibility in tier 2 and 3 cities, and enhancements in bus infrastructure and service quality, buses are emerging as the preferred choice for both business and leisure travellers.
The study further highlights that the overall Gross Booking Value (GBV) for the intercity bus market reached approximately INR 539 billion in fiscal year 2023, with the online intercity bus segment accounting for a GBV of INR 100 billion (USD 1.2 billion) during the same period.
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This represents a significant growth trajectory, with online adoption in the intercity bus sector climbing to 19 per cent in fiscal year 2023 and projected to further escalate to 26 per cent of the total market by fiscal year 2026. This growth potential offers promising prospects for OTA players like ixigo, particularly given their robust presence in tier 2 and 3 cities.
Noteworthy in the wake of the pandemic, ixigo Group experienced a fivefold growth, a feat that the VIDEC report highlighted. The report stated that in comparison to other leading OTAs, ixigo Group secured the second-highest revenue in the OTA category for fiscal years 2022 (INR 380 crore) and 2023 (INR 500 crore).
The report mentioned “ixigo Group, with ground-related activities contributing over half of its Gross Booking Value, has effectively demonstrated the profitability of the rail and intercity bus sectors.”
Co-founders of ixigo, Rajnish Kumar and Aloke Bajpai said that by addressing pain points specific to Tier 2 and Tier 3 users through rail-centric use cases and augmenting their strengths in ground transportation via acquisitions like ConfirmTkt and Abhibus, ixigo is not only enhancing its position in the market but also cross-selling and up-selling additional services such as flights and hotels to this rapidly expanding segment.
“The ground transportation category offers the two extremes of the Indian online travel market. Rail is the highest penetrated category at 82 per cent, while intercity bus is the most underpenetrated category at 19 per cent in FY23, with a long runway for a sustained growth. The OTA intercity bus market GBV is projected to increase at 21 per cent CAGR in FY23-FY26 to reach ₹153 billion. OTAs are commanding a lion’s share (nearly 90 per cent) of the online intercity bus GBV and they will continue to drive the online adoption and lead the category,” said Virendra Jain, Co-founder and CEO at VIDEC.
According to the online travel company, ixigo’s multi-app strategy has also enabled it to distinguish itself from competitors. ixigo employs separate applications to cater to train, bus, and flight travelers, allowing the company to concentrate on the rail and bus segments while encompassing other services, it said. ixigo’s AI-driven features, such as a multilingual UI, travel assistant (TARA), AI-based trip planner (PLAN), live running status updates, PNR status predictions, Siri shortcuts, and customer-centric products like ixigo assured and assured flex, have made travel easier for millions of users.
