Redbus.in: A Successful Venture of 21st

Century

INTRODUCTION

RedBus.in founded by 3 alumini of BITS Pilani, Phanindra Sama, Charan Padmaraju and Sudhakar

Pasupunuri is India's largest online bus ticketing platform founded in 2005 and is a part of ibiboGroup,

trusted by over 4.5 million Indians. With a sale of over 4,00,00,000 tickets via web, mobile, and our bus

agents, RedBus.in stands at the top of the game in bus ticketing. Redbus.in operates on over 67000

routes and is associated with 1800 reputed bus operators. Another product is their cloud based

software, called BOSS and Seat seller to bus operators and travel agents.

Redbus.in entered with a strong Market Research which involved even Bus Operators, Consumers,

Venture Capitalists and discussing their idea with them which got favorable response from different

kinds of working people. This made them prepare a code (for the software), an elaborate B-Plan and

gone for search of mentors to give life to the idea. TiE-Indus Entrepreneurs, Bangalore chapter breathe

life in their idea. They started working on Redbus. Though they have got few ups and downs, struggled

for changing the mindset of people, things settled in place within few months. It provided one platform

for the bus agencies and the people to book tickets even at the last time showing available seats instead

of travel agency selection. So that people can find agencies, bus type and convenient timings to travel

with. 10,000 travel agents use seat seller, an inventory distribution platform for agents to sell bus

tickets.

POSITIONING

Redbus.in not only provided ticket booking through PC, but also moved beyond providing value over the

internet by reaching out customers using all media like phone, Home delivery, and Physical outlets and

through SMS which is feasible for the customers. The word-of-mouth is the only marketing strategy they

used to publicize Redbus.in and this has been working out for their fair competent work, learning from

mistakes. Taking seriously the feedback of the customers to rectify the mistakes built strong bonding

between customers and companies.

The strong Market Research on the idea, Strong Technical Background that were used for the idea

implementation, innovative Business Plan, Mentors, Aiming for the customer satisfaction, update of the

work process and above all the First ever Idea to implement in India made Redbus.in a Successful start-

up. Though they have competitors like Bookbusnow.com, matus, abhibus, seatsselect.in, simplybus,

igoezy.com Redbus.in stood first in the priority place from the side of customers and also in the market.

The reason for this is just that none of the other companies have the convenience or bandwidth of

redbus.in offerings that combine consumers, operators & Travel agents.

Solving a fundamental pain point: The Indian bus industry operated in a fashion that can be best

described as chaotic. With no, central database of seat availability and bus routes, relying on a network

of travel agents to handle bookings. Agents are given quotas of seats from the bus operators, they

inform the bus company by phone each time a seat is sold to a passenger. Apart from this there were no

published fares and the customers have to pay whatever the agents fancy. The agents did not have

information about the seats allotted to other agents and thus many a times some seats would go empty.

This chaos was what the redBus.in team set out to simplify by providing a central database of seats and

bus operators, online ticketing and offline ticket distribution network. They simply provided the

customers a one stop shop for all their bus ticketing needs. All the information that they required was at

now accessible to the consumers at the time of booking, making the complete process, transparent,

quick and hassle free for the consumer. On the other hand they also helped the bus operators keep a

track of the seats sold in a centralized manner. This holistic approach to solving the macro and micro

issues faced by this industry has been one of the major reasons of their success.

Customer’s First: RedBus.in started out with 2 operators and a daily inventory of 10 seats covering two

routes and has now grown to offer ticket inventory across 12,000 routes for more than 1,000 bus

operators in 24 Indian cities (as of Jun 17 2013). Having a zero offline marketing expenditure, they have

been able to achieve this solely via word of mouth publicity and customer satisfaction. In the words of

the founder “. We worked on conversion rate; customer satisfaction; building strong technology

architecture. All this was a great IP which formed a strong foundation for what we are today.” The

company practically forced the bus operators to accept an SMS ticket receipt as payment just because it

would provide a better customer experience. The team knows that unless the people feel good while

using the service, they won’t be a return customer. Customer retention is something that they work on

actively. Apologizing in case of a screw-up, provide individual attention in case of any issue the customer

has, and then working doubly hard to fix the issue is what makes the customers trust the company with

their travel plans.

Innovative Thinking: The bus lines needed to sell seats. So Redbus.in built a site, and bought the

inventory itself from the bus lines to list on the site. Once it proved it could move seats, the operators

were happy to pay the company a percentage of seats sold as commission. Just under 50% of Redbus.in

revenue comes from the Net, much of the rest is via mobile phones. The company reduced the

dependency on the web by building its own network of bike couriers to deliver tickets and take

payments, and by setting by 7 different call centers throughout India.

Moonshot Thinking: The team of redBus.in entered a completely disorganized market, and aimed to set

it in order. With nothing already existing to assist them, they practically had to build everything from the

ground-up all the while without disrupting how the bus operators operated fundamentally. Redbus.in

ventured into cloud based software service – BOSS (Bus operator software service) for the Bus operator

with a technology that can help them better allocate drivers and seating arrangements and seat seller

software for better organizing of their clientele and provide standard rates and assured seat availability.

PRICING

Pricing is the process of determining what a company will receive exchange for its product or service.

Pricing is a fundamental aspect of financial modeling and is one of the four Ps of the marketing mix.

Pricing is also directly linked with the demand.

The initial idea of RedBus.in to set up a site that allowed customers to book bus tickets in a location-

independent manner, was triggered by Phanindra’s inability to visit his family due to lack of an available

bus ticket. The pricing strategy used by RedBus.in was dynamic pricing which helped the business set

flexible prices for the services based on market demands. In Gujarat, RedBus.in offers cheap tickets

starting at Rs.99, across five operators and 12 routes, when booked more than seven days in advance.

Redbus.in created its own pricing model. They charge some % of the amount paid by a customer for a

bus ticket as commission from the bus operators. Hence, more the booked tickets, more the commission

& more the profit. We know that when the price is constant, demand increases. RedBus.in never hike

commission, just match the amount customers pay to offline agents. A well-chosen price should support

a product's market positioning and be consistent with the other variables in the marketing mix.

RedBus.in improved their website, making it more user friendly which increased their look-to-book

conversion rate (RedBus.in look-to-book conversion rate is 4-5 times higher than other online travel

sites like Yatra, Cleartrip, etc.).

Price is influenced by the type of distribution channel used, the type of promotions used, and the quality

of the product. Redbus.in invested very less almost none on advertisements. It claims to have never run

an advertising campaign, preferring to rely on word-of-mouth through its largely loyal customer base.

Hence, adding the advertisement cost to profit.

CONCLUSION

Redbus.in identified and created market niches that have not been adequately filled

Handles reservations and driver allocations

Increase occupancy rate and reduce empty buses

When to reduce and increase prices

Database of customers

Dynamics pricing

Transparency and customer assurance and trust

Operators owning computerized systems – Redbus.in software interfaces - integrates with

operators inventory for others, Redbus.in in-house BOSS (bus operator software service)

Technologies Factors:

Online reservations

Provide various information on bus trips, routes and fares

Provide service on mobile platform

Introduce BPO and voice operations

Book online using credit, debit cards and net banking

updated online database

paperless ticketing with m-Ticket

Management Factors:

Pan India operations

Created a niche market

partnership across bus operators pan India

Transparency

Book Sears

Wide options

Return Tickets with Standard Rates

Achievements:

Forbes top 5 Hottest start-ups

Business world - Top 3 enterprises in India

All world Network – India’s fastest growing company

Deloitte - Top 5 fastest growing companies in India

Star Award achiever - Youth marketing forum

IAMAI - Internet startup of the year 2006