Rail remains huge but difficult opportunity for tech and web brands

Rail travel is a huge business. The industry is estimated to be worth US$350 billion – about two-thirds of the airline sector.

In India, for example, 90% of the population have never flown but everyone would have travelled by the railway — run and subsidised by the government.

Speaking at the Web In Travel conference in Singapore, Aloke Bajpai, CEO and co-founder of Indian travel search brand Ixigo, says there are 25 million travels daily on the Indian rail network, amounting to seven or eight billion annually.

The company sells about 1.4 to 1.5 million tram tickets alone per day.

Elsewhere in Asia-Pacific, in Indonesia, there are 33 million long-haul rail tickets sold each year, says Gaery Undarsa, co-founder and chief communication officer for Tiket.

The market is huge, with queues forming overnight at stations during the Muslim holidays, he adds.

Meanwhile, Japan’s railway is an $80 billion industry, estimates Tushar Khandelwal, chief operating officer and co-founder of Voyagin.

Yet, the industry has been slow to adopt technology, largely because many railways are state-owned monopolies that do not see a need to innovate, argues Will Phillipson, co-founder chief operating officer of recent Expedia Inc. acquisition, SilverRail Technologies.

He says: "There are a lot of things about rail that make it more complicated than air. There are no standardisations, and in a lot of countries, you can’t even buy tickets online."

Tiket, Ixigo and Voyagin agree that it can take many meetings, negotiating and "baby steps" to convince the national railway networks in the region to work with them.

Khandelwal says: "We work with Japan rail; they provide us with ticket printing machines and when someone buys a ticket, we print it in our office and deliver it to the hotel. We’re forcing this industry to be online."

But because rail tickets are relatively inexpensive, distributors like Tiket only get $1 per rail booking, admits Undarsa.

The money lies in ancillary products, with Undarsa adding: "You can’t go everywhere on a train in Indonesia. At the end of the day, you need to buy air tickets.

"When we first started selling the rail tickets, everything started moving really crazy - air tickets sales started going up, as did hotel bookings."

Bajpai agrees on the principal that rail tickets are not enough: "Monetising comes from all the other ancillaries like hotels, cabs, uber, and bus tickets."

* This article was originally published on Web In Travel.