Railways may add steam to Paytm's advertisement push

Trains in India might soon sport vinyl-wrap advertisements of Paytm, if sources are to be believed. The country’s largest mobile payment platform that also has an online marketplace is betting big on the railways to grab more eyeballs and, in the process, add customers to its 135-million user base.

As an initial step, the Vijay Shekhar Sharma-run firm has submitted a technical bid for vinyl-wrap advertising slots on 23 trains in the Central and Western Zones of the railways for a period of 10 years. These slots are to likely to be auctioned next week. Apart from Paytm, others in the fray are Media on Track, JCDecaux India, and TDI International India.

 

According to sources, Paytm has expressed an interest for placing such ads on all 12,617 passenger trains. While Paytm could use the space at its discretion and even sub-lease to other companies, it says it has no such plans as of now. According to railways officials, they’re expecting a revenue of about Rs 300 crore per annum from vinyl-wrap advertisements.

“The railways has huge potential for advertising as it runs about 13,000 trains a day, covering about 63,000 km, with passenger traffic of 23 million. Paytm is keen as this may grab more eyeballs than sponsoring a cricket match,” said a person close to the development. 

The e-commerce giant, owned by One97 Communication, bagged the title sponsorship of the Board of Control for Cricket in India (BCCI) for Rs 203 crore, or Rs 2.42 crore per match, for four years. According to sources, Paytm is also keen on participating in the upcoming auction for setting up executive lounges in railway stations. However, the firm would look at these at a later stage. 

Paytm is one of the few start-ups to have made major inroads into the Indian Railways in the past year. It is the only mobile wallet that allows users to book train tickets online through the app and website courtesy its tie-up with Indian Railway Catering and Tourism Corporation (IRCTC). 

The railways is planning to increase its non-fare revenue through advertisements. By March, it is likely to come up advertisement slots on a high-tech centralised network of 100,000 screens across 2,175 stations. It is also looking to tap outdoor advertisements across road-over-bridges, road-under-bridges and level crossings on a zonal basis.

In recent months, Paytm has seen exponential growth in its travel marketplace. Its bus tickets business recently broke even, while the hotel booking category is expected to start generating profits soon. “Our alliance with IRCTC is a major leap, as it completes the spectrum of air, road and rail ticket booking solutions available on Paytm. This is a significant milestone in our efforts to build India's largest travel marketplace,” Abhishek Rajan, vice-president, Paytm, said.

Indian Railways is also working on a plan to switch over to cash-less electronic payments for all its transactions. While around a half of all passenger tickets are currently sold through IRCTC, the new plan envisages bringing the remaining half, sold through PRS counters, under the electronic net.

The implementation of the new plan would also bring the Unreserved Ticketing System (UTS) under the electronic net. Sources said Paytm has also presented railways with solutions to capture the UTS segment.