Bus, private cars and taxis are some of the beneficiaries of the growing national highways in the country. Indian national highways infrastructure has grown at 7.5 percent CAGR in FY11-20 and is expected to grow at 8 percent CAGR over FY22-25, stated the latest report by IntrCity SmartBus and 1Lattice.
These growing national highways have given an impetus to the overall outstation market, especially outstation buses in the country. The outstation bus market is growing at a CAGR of 10-13 percent over FY20-25. The Indian outstation market was valued at $66 billion in FY20, whereas bus in this segment was valued at $30.3 billion (commands around 45 percent of the total Indian outstation market), stated the report. While COVID impacted the growth in FY21 and FY22, the growth in this segment has picked up.
Praneet Singhal, Director, 1Lattice told CNBC-TV18, “Outstation bus industry is expected to grow at 11-13 percent over the next few years, which would negate the growth offset by COVID-19 post reaching pre-COVID level — leading to a overall growth of 10 percent over FY20-25.”
Full-stack tech aggregators like IntrCity SmartBus, Zingbus etc are driving growth in India's outstation bus market. Full-stack tech aggregators have democratised the use of superior end-to-end tech for better operations and consumer experience, the report highlighted.
Meanwhile, the online bus market is expected to be at 10 percent but has the potential to reach 25 percent driven by a shift in customer behaviour and overhaul in bus operator business operation, the report stated.
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Kapil Raizada, CoFounder, IntrCity SmartBus said, “The increase in consumer disposable income, rise in leisure and exploration (high among working professionals), better availability of luxury / superior quality bus supply, revival of work from office is expected to revival the work travel, these trends are expected to increase the outstation travel growth.”
He added that a major part (50-60 percent) of the growth is expected to be attributed to a rise in prices, in line with the expected inflation and rise in fuel prices (historic trends).
The report stated private contract pre-bookable segment in outstation buses is leading to growth with around 13 percent CAGR in FY20-25.
The outstation bus segment is expected to attract private investments mainly in the tech and EV bus category, and bus operators to upgrade or purchase new buses. Kapil Raizada said, "It is expected that private funds will actively participate in outstation bus travel space due to increase in tech adoption among both bus operators and customers as well due to high growth of online bus market."
In India, the outstation travel market remains largely untapped by organised players. Thus, providing a lot of opportunities to grow.
(Edited by : Vivek Dubey)
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