OYO’s India strategy to be growth centric; China the next big frontier

Media reports suggest that Ritesh Agarwal-headed OYO would invest USD 200 million in the Indian market to build on the “quality of consumer experience.” The company plans to focus on growth and not on profits in its home market. In an email written to his team, accessed by ET, he has suggested that the company would cross-leverage this growth in other geographies. The home-grown aggregator is in the process of raising USD 1 billion and has ear-marked one-fifth of the sum for strengthening its presence in India.

Ritesh Agarwal has been bold in his assertion of turning OYO into the world’s largest hotel chain by 2023. He has expressed confidence in adding 50000 rooms each month till 2023. Plush with funds, the hotel company is backed by SoftBank’s Vision Fund, America-based Sequoia Capital, and LightSpeed Venture Partners, is justifiably buoyant at its growth prospects. Looking at recent developments, the company has indeed been in the midst of a tremendous expansion in the Asian market, among others. China has been the centre of its attention, with the company scaling up its operations to 285 Chinese cities and an inventory of 180,000-odd rooms. OYO has stated that it has it could scale up rapidly, adding 35000 rooms each month to its China inventory. OYO is expected to invest a hefty 600 million USD of the latest funding into the Chinese market.

This aside, the company has already started operations in Indonesia, Dubai, Nepal, and Britain, and plans to add Japan, and western Europe as new territories for its further expansion.

Although, it has not been a completely smooth sailing for the company. Some experts have voiced against its lop-sided focus and investments in the Chinese market and its aggressive expansion strategy. At home, OYO is also incurring the wrath of the travel agents and tour operator fraternity, for charging exorbitant commission fees. Subsequently, OYO has denied allegations and matter continues to develop.

The outcome of these developments remains to be seen, but most would agree that OYO would continue to merit attention as a serious player in the hospitality space and a company to watch out for. 

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