redBus plans to expand global footprint in next three months
Firm aims to launch ops in at least four South and Southeast Asian countries, says CEO Prakash Sangam
Online bus ticketing platform redBus is planning to expand its global footprint by launching operations in at least four South and Southeast Asian countries in the next three months, a top company executive said.
redBus, which was acquired by the Ibibo Group, a subsidiary of South African mass media company Naspers Ltd for $100 million in 2013, expanded to Singapore and Malaysia in June last year.
The company is also exploring acquisitions and strategic investments to enter these new geographies, which are expected to account for at least 5% of the company’s revenue in the next 15-18 months, said chief executive officer Prakash Sangam.
“We want to take redBus to markets which are similar to India, unorganized or semi-organized, where a lot of the booking is still offline. We have scaled up solutions for travelers, bus operators and travel agents. We will be implementing these, market after market,” said Sangam, declining to name the countries.
A former Bharti Airtel Ltd executive, Sangam took over as chief executive of redBus in June 2014, after co-founders Phanindra Sama and Charan Padmaraju quit the company.
redBus joins the league of a handful of homegrown consumer Internet start-ups such as doctor discovery and medical appointments platform Practo Technologies Pvt. Ltd and restaurant discovery and food ordering platform Zomato Media Pvt. Ltd that have gone global.
While Zomato is present in at least 22 countries including the US, New Zealand, Australia and Italy, mostly through acquisitions, Practo has branched out to countries such as Singapore, Philippines, Malaysia and Indonesia, where the markets are yet to mature and lack any formidable competition.
There are at least 10 start-ups in the online bus ticketing segment in Southeast Asia, according to Tracxn, a start-up tracker. A few notable ones are Singapore-based Easybook, Malaysia-based BusOnlineTicket and CatchThatBus, Philippines-based PinoyTravel, Indonesia-based Bosbis and Vietnam-based VeXeRe, Vbus and Vedayroi.
According to Sangam, the number of bookings on redBus has surged more than three times since its acquisition from 600,000 every month in 2013 to 2.1 million at present.
Apart from redBus, earlier owned by Pilani Soft labs Pvt. Ltd, Ibibo Group in March 2014 acquired YourBus.in, an online bus tracking and analytics platform owned by Lucido SoftLabs Pvt. Ltd.
Ibibo Group raised $250 million more from Naspers Ltd last month. redBus will spend a significant part of its share of the funds in penetrating deeper into western and northern India, which together account for close to one-fourth of the company’s revenue.
“Geographically, we are over-represented in South India. We want our representation to be uniform across the country,” said Sangam. A significant chunk of the investment will be made towards building and marketing the redBus brand in these locations.
redBus will also focus on growing the hotels category, a segment which it entered in April 2014, a logical extension of the business, especially because commission in the hotels category could be almost double that of buses. The company currently retails hotels aggregated on Goibibo.com on its platform.
redBus competes with MakeMyTrip, Cleartrip and Yatragenie, among others. Many of them which started as online platforms for booking air tickets later expanded into hotels and packaged tours to become all-round travel destinations and retain existing consumers with multiple services.
Alibaba-backed online payment services provider Paytm launched bus ticketing services in July last year in an attempt to increase use cases for its mobile wallet beyond utility bill payments and mobile recharge.