Small city = big growth

INTERNET: Online travel bookings in smaller cities outpace those in the larger towns and metros.

The myth that only us in the large cities book travel tickets on the net is just that. A myth. Online travel players are logging aggressive growth from the smaller cities, though, obviously, this is built on a small base.

Sample this. The share of the small cities in the overall bookings done at the railways web site (irctc.co.in) has gone up sharply from 35 per cent in March 2005 to 52 per cent in March 2006.

In contrast, Delhi's share in bookings has come down from 32 per cent in March 2005 to 23 per cent in March 2006. In the same period, the share of Mumbai is down from 11 to 7 per cent, Bangalore is down from 11 to 8 per cent and Chennai is down from 11 to 10 per cent, though in absolute terms, Mumbai, Delhi, Chennai and Bangalore continue to be the biggest markets for online bookings.

"One would not think of e-commerce from these smaller cities, but there it is. There has been enormous growth," informs Amitabh Pandey, group GM, IT Services, IRCTC (Indian Railway Catering and Tourism Corporation), as he digs out data from the 200-odd cities where they sell tickets online.

"When we started irctc.co.in, several people laughed and said who will buy tickets online," he says. Today figures speak for themselves.

There has been a 75.87 per cent growth year-on-year in bookings in 2004-05 which accelerated to an even greater growth of over 100 per cent in 2005-06.

What is pushing these numbers? Internet growth in smaller cities is growing faster, though it is being led by cyber cafes, feels the secretary of the ISP Association of India, Deepak Maheshwari.

Keyur Joshi, Co-Founder and COO of makemytrip.com attributes growth in bookings from smaller cities to improvement in airport infrastructure.

"If there is increase in flights to a certain city, online bookings have grown," he says. In recent times, they have seen growth from cities like Lucknow, Ahmedabad, Rajkot, Ludhiana, Srinagar and Nagpur, among others.

What is noticable for makemytrip.com though is the fact that non-air bookings like hotels, car-rentals and packages, are also growing from smaller cities. About 30-35 per cent of their non-air bookings are from smaller cities (mini-metros and others).

Since all online buying requires either a credit card or a direct banking payment gateway option, you would now understand why financial companies are also shifting their sales focus to these smaller cities.