For decades Indian entrepreneurs have faced worst excesses of the state due to the leadership’s belief in Nehruvian socialism. The ‘regulatory cholesterol’ and bureaucratic hurdles sucked the energy of Indian entrepreneurs and kept them at foot. The freeing up of Indian economy has given the country some jewels of business world.
OYO Rooms, a website for budget lodging incepted in 2013 by 18 year old Ritesh Agarwal has become the symbol of Indian entrepreneurship. The company has more than 4.5 lakh listings in 800 cities of 80 countries including India, China, Malyasia, United Kingdom, United States, and Japan. China is the second largest market of the company where it has presence in 26 cities and employs more than 1,000 people.
The company has brought revolutionary changes in tourism and hospitality industry. OYO is not any typical company in the sharing economy as it is more involved in the operations of product.
OYO generally takes up a stay place in a good locality and ‘standardizes’ it. The basic facilities offered in OYO Rooms are by and large same in most of the places and its price range is very wide. The price of OYO Rooms is many time lower than that of a ‘starred hotels’.
OYO has brought the cost of hotel stays substantially down and forced the big hotel chains out of business. The luxury hotel chains across the world like Hilton, Radisson, Marriot are threatened by the expansion of OYO. The company has also eaten out the business of one or two star hotels which used to charge disproportionately due to their prime location.
OYO capitalized on the shortage of standardized accommodation in efficient budget. Softbank Group, the Japanese multinational led by visionary Masayoshi Son was first to realize the potential of OYO Rooms and invested 100 million dollars in 2015. In September 2018, the company raised another 800 million SoftBank’s Vision Fund which now holds almost 50 percent of the shares of the company.
OYO has been growing through leaps and bounds for the last few years. As per a report by Economic Times, “In December 2018, It has recorded global sales run-rate of $1.8 Bn in December, 2018, growing at 4.3X. At the same time, its India business was growing at 3X with a sales run-rate of $1.2 Bn annually.”
The internationalization of OYO Rooms is going at full pace. In the 21st century, ‘budget travel’ is considered cool among youth and the prospects of the company look very bright. The company is aggressively expanding in China. In an interview with Economic Times, Ritesh Agarwal said, “China is a home market and we invest in leadership there like we invest in India.”
“With some of the best and brightest minds joining the leadership team in our home market China and high-priority markets in Southeast Asia and Europe, I am confident that they will be able to help us set new benchmarks in the hospitality industry. What we are attempting is to solve the demandsupply imbalance that characterises the global hospitality sector through technology and talent and these appointments will take us a step ahead in this direction,” he added.
Ritesh Agarwal led OYO Rooms is among the growing list of Indian companies for whom the vast Indian market is not enough. A few others are Lenskart, Ola, Zomato which took their businesses to the global market and have a very successful experience in a few markets. These companies and their leaders are best examples of what India is capable of if the entrepreneurs of the country get a free hand and the ‘regulatory cholesterol’ is minimized.