Planning

Boarding

Disembarkation

Destination

•Online reservation• Coach/saloon booking

•Tatkal •Hotel•Retiring room•Cab•Book stall/Entertainment•Food kiosk•Washrooms•Waiting rooms•Rail enquiries 138/139 •Tourist trains/ Conference on

trains •Food in train•Dial a snack•Hotel•Retiring room•Newspaper/magazines

•Prepaid taxi booths•Khadi kiosks•Shops•Cab•Book stall•Entertainment•Tourist info booths

Passenger Touch points and VAS

SHAILENDRA JAISWAL SENIOR PROFESSOR MANAGEMENT

Agenda

• An introduction to Value Added Services (VAS)

• Imperatives of VAS

• The VAS Landscape – MVAS and VAS value chain

• Indian Railways and VAS – RVAS

• Value added services in Retail , Entertainment , Networking and

Wellness

• Revenue Potential and Challenges

• Way Forward .

CONFERENCE ON WHEEL

CONFERENCE ON TRAIN SERVICESTargeting the unmet business needs

• For business travelers Conferencing on Train facility• Trains running between important cities like Pune-

Mumbai , Chennai Bangalore , Chandigarh -Delhi • Integration of travel /tourism and business• Meeting and conference industry is interested in non

metro locations .• Foreign travelers can use Conferencing on Train facility

in the various tourist circuits in operation in India

CONFERENCE ON TRAIN SERVICESTargeting the unmet business needs

• To Offer the best audio visual and technical equipment for high level business meetings or conferences .

• The Meeting Room on Wheels will be one of the most spectacular meeting venues for the discerning business person. Its facilities can be used for team building as well as for corporate incentive programmes.

• IR may design coaches with conference facility to enable the business travellers to optimally utilize their travel time.

• The service may be appropriately priced and no political consideration would shadow the decision, this being a pure commercial activity.

Security

Telecom

General Maint ( civil & Elect)

Medical &Medical colleges

Recruitment

Manufacturing

Linen services

Parcel handling

Catering

CORE ACTIVITES

OperatingCommercialTrack & OHESignallingRolling StockHRFinanceSafety

SMILE CURVE THAT MAKES YOU TO FROWN

Higher Added-value and Lower

Replacement

Marketing

Brand

Innovation

DesignR&D

R&D/Innovation Centre

Value Creation

Standardisation

InnovationR&D

Design

AddedValue

Manufacture

Assembly

Logistics

Marketing

Brand

Standardisation

Value-added process

Global Logistics Center

Logistics

AssemblyManufacture

LOSS TO PROFIT TRANSFORMING RAILWAYS PASSENGER BUSINESS

Challenges

1.HIGH CAPITA L COST

2.STATION AS COST CENTRES

3. OVERCROWDING AT STATIONS AT STATION AND TRAINS 4. COST OF SERVICES LIKE SANITATION , ELECTRICITY , WATER 5. COST OF ANCILLARY SERVICES

6.HIGH COST OF MAINTENANCE

7. NON VIABLE LINES

LOSS TO PROFIT TRANSFORMING RAILWAYS PASSENGER BUSINESS

Challenges OPPORTUNITIES

1.HIGH CAPITA L COST 1.OPTIMIZE RAKE AND LOCO LINKS , LOW COST STATIONS

2.STATION AS COST CENTRES 2.STATION AS PROFIT CENTRES

3. OVERCROWDING AT STATIONS AT STATION AND TRAINS 3.MONETIZE FOOTFALLS FOR ADVERTISING AND LEAD GENERATION

4. COST OF SERVICES LIKE SANITATION , ELECTRICITY , WATER 4.LEAD IN RESOURCE RATIONAL TECHNOLOGY BECOME TECHNOLGY DEVELOPER , SULABH , WATER LESS URINALS

5. COST OF ANCILLARY SERVICES 5.VALUE ADDED SERVICES

6.HIGH COST OF MAINTENANCE 6.NEW MODELS OF MAINTENANCE

7. NON VIABLE LINES 7.NEW BUSINESS MODELS IN PPP

Value added servicesto augment revenues for Making Passenger business

profitable

Value Added Services

Value added services add value to the standard service offering

Improved Service Vs. Value added Service

Value Added Services Characteristics

• Can stand alone in terms of profitability and/or stimulate incremental demand for core service(s)

• Can sometimes stand alone operationally • Do not cannibalize basic service• Is an add on and can be charged • May provide operational and/or administrative

synergy with core service or other VAS• Over a time VAS may become a standard service

Value Added Services in Mobile (MVAS)

The Mobile VAS Value chain

Consumer

Technology enabler

Content aggregator

Content provider

Operator

MVAS – The numbers

• Mobile VAS in India to touch 55000 crore Rs. By 2015

(PWC report)

• VAS has been driving Average Revenue Per User (ARPU)

• VAS forms about 15-20% of the revenues

• For Do Co Mo - about 33%

What can Indian Railways aim for?

Indian Railways and VAS Railway based Value added services

Imperatives and Need for VAS• People are willing to spend more

• Disposable incomes increasing• Higher class occupancy is increasing• Impulse purchase

• Indian Railways• Supply side constraints

• The needTravel is a derived need it is done primarily for other needs , we can help

passengers in meeting their need better• The Business model

• Source of revenue• Role of Railways• Partnership in design delivery and execution

Players in the MVAS Market

• The end-user, the consumer• Mobile service providers or operators (MSPs)• Aggregators or portals• VAS content and service providers• Media companies• Handset/instrument manufacturers• Government ministries and regulators in various

fields of information, communication and entertainment.

Players in the RVAS Market

• The end-user, the passenger • Railways • Railway operators • Aggregators such as owner /operators of Coaches ,

trains , stations waiting rooms , platforms , parking lots or portals

• VAS service providers• Service designers • Coach and ancillary manufacturers • Government ministries and regulators in various fields of

information, communication and entertainment.

APOLOGIES FOR BEING OFF THE MARK CHARACTERISTIC OF INNOVATION PROCESS

Value added services in Networking , Retail ,Entertainment , and Wellness

Value added services in Networking

CONFERENCE ON WHEEL

Value added services in Networking Few examples

• CONFERENCE ON TRAIN SERVICES• TRAIN FOR MEETING AND CONFERENCES• CORPORATE GROUP MEETING TRAIN TRAVEL

SERVICES .• Train Service For Weddings

CONFERENCE ON TRAIN SERVICESTargeting the unmet business needs

• For business travelers Conferencing on Train facility• Trains running between important cities like Pune- Mumbai , Chennai Bangalore ,

Chandigarh -Delhi • Integration of travel /tourism and business• Meeting and conference industry is interested in non metro locations .• Foreign travelers can use Conferencing on Train facility in the various tourist circuits in

operation in India • To Offer the best audio visual and technical equipment for high level business meetings or

conferences , The Meeting Room on Wheels will be one of the most spectacular meeting venues for the discerning business person. Its facilities can be used for team building as well as for corporate incentive programmes.

• IR may design coaches with conference facility to enable the business travellers to optimally utilize their travel time.

• The service may be appropriately priced and no political consideration would shadow the decision, this being a pure commercial activity.

TRAIN FOR MEETING AND CONFERENCES

CORPORATE GROUP & MEETING TRAIN TRAVEL SERVICES

• Trains /coaches / seats for corporate travel as well as hospitality and incentive travel

• Market it as a superior, cost-effective way for executives or larger groups to travel to and from any event.

• Provide group rail travel for a corporate hospitality event meetings, conferences and exhibitions .

• Marketing a train as a meeting venue in its own right.• Conference train travel services are of particular interest

to the MICE or Meetings Industry sectors, being appropriate for all their areas of expertise, including conventions and events.

Train Service For Weddings

• Offer unique Wedding train service for customer need to travel in comfort and style between two destinations some distance apart - whilst maintaining the celebratory atmosphere of the special day.

RVAS Landscape

• Do we offer VAS

• Share of VAS revenue

• Revenue Potential

• What is our ARPP

• Where will it take us

• Key Challenges

• Role of railways

• Facilitate an ecosystem for entrepreneurs to provide service

• Fortunate incubators are keen to promote entrepreneurs to design and provide services

• Indian railways can partner with incubators to experiment , prototype and implement services to meet

passenger needs .

Value added services in Railways Passenger Amenities

• Waiting Room• Retiring room • Toilet • Water • Air and Air conditioning • Light • Food • Assistance to differently enabled • Luggage handling• Mobile charging • Information• Choice of berth• End to end/through tickets with break journeys• Internet • Wi fi in trains• Provision of napkin/ linen • Parking • Emergency Medical Attention• News • Entertainment • Global Product Launch• Retail • Wellness• Laundry • Home to home delivery of luggage

Planning

Loading

Unloading

Destination

•Online booking•Information•End to end connectivity?•Insurance?•Warehousing• 3PL /Freight forwarding

•Express delivery•Tracking•Tatkal?•Pickup at doorstep

•Drop at doorstep•Warehousing

Freight Touch points and VAS

SEAT IN TRAIN

SEAT RESERVATION

SEATRESERVATION

COMPUTERSISED

SEAT RESERVED THROUGH INTERNET

Reduction in costs Service expanded

Mobile Based reservation

SELL SOFTWARE TO WORLD RAILWAYS

BASIC SERVICE REVENUE

ADDITIONAL REVENUE

OCCUPANCY

ENHANCED

CUSTOMER BASE EXPANDED

COST REDUCTION

CUSTOMER BASE EXPANDED

COST REDUCTION

DYNAMICOPTIMIZATION

CONTINUOUS IMPROVEMENT TO CONTINUOUS INNOVATION

SEAT UPGRADEDTO HIGHER CLASS

NEW REVENUE STREAM

REDUCTION IN EMPTY SEATS

We need to do this in the services we already offer like parking

Designing next level of services on value added services we provide

• Value added Parking Services• Valet Parking • Vehicle maintenance services• Vehicle cleaning services • Locker services • Retail aggregation hub• Battery charging• Insurance monitoring and alert• Low tyre pressure alert .

Services are response to customer needs

• We need to do more in the area of • Customer Segmentation • Consumer behavior insights • Collect Passenger Information from social

sites , and data from collaborative organizations like LIC to Learn about needs .

• Convert information to insights to offer need based services generate generation

Railways role in RVAS value chain

Consumer

Technology Enabler

Content Aggregator

Content Provider

Operator

Amenities on railway premises

Information/PNR status

CRIS

IRCTC

VALUE ADDED SERVICES RETAIL ON TRAINS AND AT RAILWAY STATIONS

Quantity Of Passenger As Problems To

Passengers As Opportunity

• VAS Revenues are also proportionate to footfalls

• Surprising results of MRVC survey • Footfalls on Indian railways 5 crore per day • Suburban footfalls 2,65 crores per day•

Footfalls at Malls in Mumbai Metropolitan Region and NCR

Week day Sunday1 High Street Phoenix Mumbai 45000 65000

2 R City Mumbai 65000 85000

3 Inorbit Mall Mumbai 23000 60000

4Ambience Mall

GURGAON 50000 85000

5Great India Place

NOIDA 75000 125000

6 SELECT CITY SAKET 25000 70000

Footfalls at Railways stations in Mumbai Metropolitan Region and NCR

Station Footfalls in lakhs per day

1 Thane 6.54

2 CST 6.36

3 Andheri 6.04

4 New Delhi 5.35

5 Churchgate 5.05

6 Bandra 4.91

7 Virar 3.9

8 dadar 2.90

9 Kurla 3.81

10 Kalyan 3.60

RAIL BASED RETAILING

Rail Mall

• Train stations are ideal locations for businesses to set up shop, because they are hubs of human interaction where hundreds of thousands of people come and go day and night.

• Each person in this flow of foot traffic is a potential customer who might need a specific item or purchase on impulse while waiting for a train.

• To succeed with retail at a train station, passengers need an accessible and affordable shopping experience offering merchandise or services that travellers might not quickly find elsewhere en route while travelling.

Tempting: A 'virtual supermarket' consisting of posters of shelves stocked with goods pasted on platform walls is used by smartphone-wielding

commuters at a Seoul subway station

Railways to introduce onboard shopping facility in Shatabdi

• For chocolate lovers, trolleys showcasing luxury items will have a fabulous range of delicious chocolates, the official said. Besides, there will also be souvenirs associated with railways on offer for Shatabdi passengers.

• A firm has been engaged to provide on-board facility on a pilot basis in Shatabdi trains for a month, he said, adding, "It will begin shortly with Bhopal Shatabdi. The shopping experience on trolley will also be carried out in other Shatabdi trains to ascertain the response."

• As per the arrangement, the firm has deposited Rs two lakh as security money and will also pay 12 per cent of the sale to railways.

• Based on the response, Railways will decide to expand the trolley service on a long-term basis. "A tendering process will be opted to select the firm for providing on-board shopping facility on regular basis in Shatabdi trains," the official said.

• There will be two trolleys in each Shatabdi which will cover the entire train during the scheduled journey hour.

• Aiming at providing more facilities in premier trains, Railways are also planning to introduce on-board entertainment systems in Shatabdi trains where the passengers can view movies and television serials directly via satellite.

Value added services in WELLNESS TOURISM

Sharing value across the wellness chain

Creating value across the wellness spectrum

WW

Wellness is a multi trillion dollar industry India with its 5000 years of

Heritage is well Positioned to exploit the

opportunity

Opportunity for Indian Railways

• Global healthcare revenue US$ 2.8 trillion• The multibillion dollar medical and wellness tourism industry which

has recorded remarkable growth in the recent years.• Several features such as cost-effective and advanced healthcare

systems, availability of specialized and skilled healthcare professionals, and increasing popularity of traditional healing systems and alternative medicine, have all positioned India as a favorable destination for wellness and health care in the global scenario.

• Operators and wellness service providers would be interested in using Indian Railways for providing an integrated journey cum destination package .

•

Global wellness congress in Delhi

Revenue sharing massage chair concession

• Massage chairs can be configured to fit almost any space and are a revenue opportunity includes free furniture that becomes a first-class soft seating option

• Turns under-utilized areas into revenue-generating space

• A massage chair concession provides superior service through a no cost, revenue-generating solution. Service provider deploys the massage chairs at no charge, operates and maintain the chairs, manage the service – and commission on the revenues collected!

Revenue sharing massage chair concession

Interactivité et détente• The train’s name iDTGV stands for (interactivity and recreation)

TGV (The Idt GV provides two classes of service: “iDzap” and “iDzen.” The “iDzap”-area is located on the upper deck and provides services for which passengers pay extra including: entertainment (DVDs, game consoles, and traditional games), health-related services (e.g. massages ), and improved food service.

• Furthermore, companies and groups can reserve a special lounge area for meetings or other purposes. The “iDzen”-area is located on the lower deck and provides a quiet atmosphere, where the use of cell phones is forbidden. In order to facilitate a restful journey, a recreation package including eye mask, neck pillow, and earmuffs is sold to passengers.

April 17, 202356

Stakeholder Relationship Map

WELLNESS TOURISM

Travel Operator

University

Investor

Pharmacy

PharmaceuticalCompanyMedical Equipment

Company

Insurance Company

Other Institutions

Sightseeing Spot/Market/Hotel

Transportation

Irctc

Patients and relatives

Hospital

Advertising Company

Distributor

Primary Stakeholders

Associated Stakeholders

Value added service

Entertainment on trains and at Stations

• GLOBAL PRODUCT LAUNCH • NEW MOVIE RELEASES • LIVE ENTERTAINMENT • TALENT HUNT AND COMPETITION• FESTIVAL TRAINS • NEW MEDIA

TRANSPARENT TV IN PLACE OF COACH WINDOW

Challenges Opportunities

STATION AS PROFIT CENTRE INSTEAD OF COST CENTRE

1.Sanitation and cleaning cost .

2.Expenditure on Providing information Information as a source of earning by becoming media for attracting consumer attention

3. Crowd on platform CROWD MOVEMENT AS A SOURCE OF ENERGY

4.Expenditure on energy PARTNER WITH ENERGY COMPANIES TO

5.Expenditure on waiting and retiring rooms

6.Cost of water for drinking , cleaning From Cost To Profit

7.

8.

STATION AS PROFIT CENTRE INSTEAD OF COST CENTRE

Railway stations challenges and opportunities

• The railway stations located in major metropolitan cities individually handle more passengers than the numbers handled by all airports of the country put together. But these stations are inadequately designed and ill equipped to handle such a large number of passengers.

• The stations do not provide easy access or comfortable experience prior to boarding or after disembarkation from trains.

• Street-level access is generally restricted to one or two end-platforms (except at terminal type of station layouts).• Inter-platform connectivity is through foot over-bridges which are not passenger-friendly and often inadequate

for large numbers of passengers. • Good-quality waiting space and modern shopping or retail outlets pertinent to passengers‟ needs are largely

absent. • Incoming and outgoing passengers are not segregated at platforms.• Platforms are also used for parcels, so that floor space for passengers gets reduced. Similarly, catering stalls

occupy part of the already limited space on platforms. This leads to severe congestion on platforms.• In addition, lack of hygiene and cleanliness on part of the traveling public as well as absence of a sustainable

waste management system means that our major stations are far off from being environmentally appealing places.

• Besides these functional inadequacies, most of the stations have not been built with any architectural or aesthetic consideration and as a result, these serve as a poor introduction to the cities they serve.

• Leveraging a part of the real-estate occupied by the stations, including the use of airspace, and the bridging of viability gap funding by government could render the development of such stations an attractive proposition for PPP.

Vendors of Ganga Jal• We are pleased to introduce ourselves as Government approved

Packers & Distributors of Holy Natural Gangajal from Gangotri,India, which is collected in its purest form without giving any chemical treatment, from its very starting point and filled with automatic machines, at Gangotri Valley of Uttarkashi District, India, from a height of over 4300 feet.We are a registered company with Department of Industries, Government of Uttaranchal and were granted permission for packing of Gangajal.We are Registered with Ministry of Communications & IT, Department of Posts, Government of India.We are authorized by US Custom & Protection Department that, we can Export the Holy “Gangajal” to USA, without any Import duty.

Passengers paid travel in Exchange for plastic bottles.

HOSPITALITY AT STATIONS

• 2000 EXISTING RETIRING ROOMS• RENOVATE OPERATE AND TRANSFER• BUILD ADDITIONAL RETIRING ROOMS

( BUDGET HOTEL)• CASE STUDY OF MUZZAFPUR SHOWS LOSS

OF RS 24 LAKHS CAN BE TRANSFORMED TO EARNING OF RS FIVE LAKHS

Income with new tariff @ 80% occupancy)

S No Item No of rooms

Proposed rent

Rent earmed per annum

1 AC Room 8 1650 3854400

2 Non-AC Room

2 900 525600

Total 10 4380000

68

Net income after expenditure

S No

Item Income Expenditure Gross profit

Net profit

1 Income from new tariff 4380000

2 Payment of fixed usage charge 642400

3 Annual expenditure of managing retiring room in new scheme 2787000

4 Payment of variable licence fee X

TOTAL 4380000 3429400 950600 950600-X

69

Financial Justification:Saving in Expenditure:• Saving in man power to manage the rest

rooms/booking/attending to the occupants etc.• Saving on Repairs to

Buildings/whitewashing/painting/maintenance.• Saving on Repairs to Electrical appliances.• Saving on Washing of linen, bed sheets, pillows, pillow covers,

bed covers etc.• Saving on replacement of above.• Saving on repairs/replacement of furnitures• Saving on provision of flooring/replacement/repairs etc.

70

Conclusion: It is a Win-Win situation.

Benefits to Private Partner:1) Fixed income for 15

years2) No interference in

decision making.3) Clear road map.4) Clear policies.

Benefits to Railways:

Reduction in ExpensesIncrease in Revenue

Transfer of ownership after a period of time. One small way out to improve

this facility in the midst of the tight financial crunch.

71

Electronic locker service

• Electronic luggage locker at stations • A wide range of financing models from rental

or leasing to fully-outsourced management and even risk-sharing concession operations are possible .

• In a concession model a partner manufactures, installs and maintains locker locations in return for a share of the revenue stream from customers.

Reorganizing organizational structure of stations

• The working of station and control should be assigned to a authority. The authority should have powers of expenditure, plan, propose and execution for the management of different activities of station excluding train operation. It can be headed by station commissioner and should have members from Engg, Electrical, Mechanical, Commercial, Medical and signal &Telecom departments.

• The contract for maintenance to be combined• Master plan for all facilities.• Station commissioner as head of station .• Staff of all departments directly under Station Commissioner .

Option to passenger to travel by a different train

• We assume that not all passengers are well informed and their requirement is barely to travel between two stations. It is suggested that an option may be taken from the passenger at the time of booking that alternative train may be offered to him in case of non-confirmation of berth in train applied for. The mobile number of the passenger should be captured to communicate with him. This will not only result in better utilisation of assets but also higher satisfaction level amongst public. This facility has also been announced in the budget for 2012-13 on a trial basis.

Revenue Potential

IMAGINATION IS THE ONLY CONSTRAINT

Key challenges

• India after 2 G

• Departmentalism

• Change in Policies

• Incentive structure.

• Execution

Way Forward

• Facilitate an ecosystem for entrepreneurs to provide service

• Fortunate incubators are keen to promote entrepreneurs to design and provide services

• Indian railways can partner with incubators to experiment , prototype and implement services to meet passenger needs

• Call for expression of interest for Value added services.• Railway stations to be run by railway PSU’s• Segmentation of passenger business on the basis of traffic density • Indicative Profit and loss accounts of passenger business of zonal railways on

monthly basis • Reorganizing organizational structure of stations • Profit and loss accounts of stations

Before You Go

• Bhool se kabhi hume bhi yaad kiya karo.. Pyar nahi to shikayat kiya karo.. Itne bhi gair na samjho ki baat na karo.. Call nahi to miss call he kiya karo.