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Entrepreneur Name: Phani

Business Name: Red Bus

Introduction:

October 2005 Phani wanted to go to home from Bangalore to Hyderabad on Diwali an Indian Festival

He could not buy tickets because of too much rush of passengers on the occasion.

He identified that it is a big problem

He knows about online booking of Airline tickets and railways tickets:

So he decided to go with a Business Venture Named Red Bus:

Problem was that thousands of agents across the country which were selling different bus tickets and

they do not know about the availability of tickets when they sold out their all tickets. There was no

single source from which one can know about the availability of tickets.

He decided to solve the problem through a business venture.

He share this with his friends who appreciate and start discussing on this idea. And suggesting names of

the business.

After lot of discussion they come up with the name Pilani soft Labs Pvt. ltd.

Redbus name was chosen after lot of discussion.

It was very beneficial for them to live in Bangalore. Because in the same time India was a major hub for

outsourcing of services from various parts of the world special in the form of IT and IT enabled services

and Bangalore was undisputed leader.

Bangalore was a major place which was host of Indian IT companies and it create a big demand for

skilled people.

At the same time internet usage was growing rapidly, In India 81 million people were using internet

Lot of E-commerce businesses were growing due to internet.

Three partners started interacting with agents and bus operators to understand the market dynamics

and requirements. They figured that most operators were small players who did not know technology,

and travel agents were smaller players who did not care about technology.

They started working on software while working on their routine jobs.

They were no sure that would it work or not but they were sure that it would help customers, operators

and customers.

The thing up to mentoring of their business venture, it was by kirenbir and Sanjay.

They were trying to explore their Idea more clearly and gave them assignments about customer and

market survey. He made them realize that how difficult it would be.?

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Birth of RedBusTeam realized that the solution was to build online portal which would provide online tickets booking.

The Indias first online bus ticketing system was founded with US $10,000 in August 2006. The core

preposition of Red Bus was centralized Ticketing System based on idea of Airline and Railways Ticketing

system.

Testing TimeInitial days were very tough for all three friends because they had left their jobs and invested their

savings. It was very big test for them. They started their marketing efforts from boarding points, bus

stops, and young professionals which were their target audience and they deliver tickets themselves

even. Customer by customer operator by operator Red Bus built their business.

Initially Bus operator were taking them as a new medium of selling their tickets and thought about them

as an agent. Slowly and steadily more and more operators signed up. They were paid commission for the

tickets sold.

Industry and CompetitionIndias road travel segment was about US$ 3 billion in 2008. The trend of E ticketing in Inidia had

tremendous growth in the last few years. It accounted for 40% of the air line and 30% of the Railways

ticket Sales.

The rapid growth of RedBus was too glairing to be missed and competition started making its entry.

Redbus faced competition from Ticketwala.com. They put lot of efforts but their business model could

not work for them. Redbus being the largest player gained a lot of traction from consumers.

Fund Raising

Fund raising was mainly from two companies 1st was seedfund and second was Helion. Total funds were

raised up to 3 million from there.

Inventory AggregationIn start they adopted inventory aggregation as practicing old inventory management system. But after

they started using to encourage operators to get on the board. Lots of operators and passengers were

getting on single point. This model worked very much for them.

Revenue ModelThe revenue model of the Red Bus was fairly simple. Redbus received commission on the tickets sold.

Building a company with a Distinct CultureIt is all about formal code of ethics.

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Issues

1. 1st issue was to launch inventory Management System targeted at bus operators.2. Majority of the market was comprised on small players with a fleet size of less than 20 buses,

how they would respond?

3. The other issue was entry of major travel portals like yatra.com and makemytrip.com. Issue wasto plan whether to compete them or standalone as Redbus was?

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