OYO IN CHINA

ABOUT OYO
ON YOUR OWN ROOMS

• OYO was Founded in 2013 by Ritesh Agarwal in Gurgaon

• OYO is an Indian hospitality chain of leased and
franchised hotels, homes and living spaces.
• Product and service provided by OYO are-
 OYO Townhouse
 OYO Home
 OYO Vacation houses
 Silver key
 Capital
 Collection O
 OYO Life
 YO ! Help
• The company is currently present in over 259
cities in India with over 8,700 hotels and homes,
and more than 1,73,000 rooms.
• Currently company is operating in more than 80
countries & having large market in countries
like India, Malaysia, UAE , Nepal, China,
Brazil, Mexico, UK, Philippines, Japan, USA
etc.
• In world company is present in more than 800
cities, with more than 23,000 hotels, 850,000
rooms, and 46,000 vacation homes, worldwide.
• The company is currently valued at $10 billion 
• Company investor includes Softbank Group,
Greenoaks Capital, Sequoia India, Lightspeed
India, Hero Enterprise , Airbnb and China
Logging Group.
• In 2019, OYO registered a revenue of USD 951
million, a 4.5 times increase on a year on year
basis, as compared to USD 211 million.
WHY CHINA
ON YOUR OWN ROOMS

• China is one of the biggest, most untapped markets in

the hospitality segment worldwide
• OYO officially launched operations in China during
November 2017 and is now present across 265 cities.
• According to a AT Kearney report, China’s hotel industry
has experienced meteoric growth, making it a $44 billion
business with 2.5 million hotel rooms.
• OYO calls China its Second ‘ Home’ Market
• In China, the need for budget accommodation is needed
more in deeper parts of the country. The nation is vast
and wide, and there are fewer stay options available in
the region
• China is biggest market for OYO is because Hotel
penetration rate is very low in china which just 4 rooms
per 1000 capita. As compared to other countries like UK
Which as 10 rooms per capita and US has 20 rooms per
capita.
• As Sam pointed out in his interview, the Chinese hotel
industry has a huge ‘white space’, where traditional
hotel chains prefer to focus on premium to luxury
accommodation and hotels with larger inventory. In
contrast, what OYO is tapping into is the budget hotel
experience and giving the consumer standardized
amenities with consistency of service.
• OYO in India has 1,73,000 rooms and in China 3,20,000
rooms, and counting. Today, China is a bigger market
for OYO than India. Now if OYO does acquire the mid-
scale hotel brand Qianyu, the company's China room
number will future increase to close to 4.5 lakh rooms.
• In China, unlike in India, OYO has focused on Tier 2 to
Tier 6 towns, with price points ranging from RMB 69 to
199 ($22 to $36) per night.
 INDUSTRIAL OVERVIEW
•Mission to create beautiful space by
empowering hotel owners to become better
hospitality players

•Flourishing and booming tourism and

hospitality industry in China owing to the
large number of foreign visitors

•Aggressive expansion plan to capture

large market share

•Creation of employment for young

hospitality enthusiasts beside enabling better
accommodation for middle income group
people
• Building local vendor business
ecosystem
• Oyo’s skill institute trains the on ground
Staff continuously to tackle the customer’s
changing requirements and ensure consistent
customer experience
• Advanced hotel management enhanced,
booking technology, quality control method
and efficient AI
• Micro-optimization takes place each day
for demand projects to decide on dynamic
pricing of OYO rooms
•OYO’s intense focus on China is underlined by the pace at which it is building a local leadership team, often by poaching a number
of senior executives from some of the largest consumer technology companies
•Recruitment of full time employees – who have the experience of operating with the wisdom and maturity of large valuable
organizations, as well as the passion and energy of growing meaningfully fast
•Distributed leadership form of management that empowers a lot of folks, which is probably what’s needed for the company, given its
focus on China and expansion into other overseas markets.

•6OO supply chain partners and over 100 warehouses

which keeps the infrastructure availability very strong
leading to offering of products and service at 20-30%
cheaper price
• 70% of its business in the country is through organic
channels, which includes the OYO app and walk-ins,
with certain digital platforms
•15-20% of the revenue generated is from third party
distributors which include online travel operators
CULTURAL DIMENSIONS
• Understanding the need for localization-strategies
that would stand aligned with the perspective of the
localities
• Understanding the need for budget accommodation-
People usually prefer cheaper and reasonable stay
more

• Integrating with local payment instruments

• Making use of technology infrastructure to
provide optimum security and least cost as
demanded by the Chinese
• Providing multi-language customer service
platform
 MARKETING CHALLENGES

LOCALISATIO
MENTALITY N
INDIA VS
04 01 FOR
CHINA MARKET
PENETRATI
FRAGMENTED ON
MARKET SATURATION
UNBRANDED IN CHINA
HOTELS 03 02 MARKET
 ENTRY STRATEGY
STRATEGIC
PARTNERSHIP TRANSFORM HOTELS
• With Meituan, China’s
leading ecom platform.
01 03 • Improve occupancies &
• China Lodging Group RevPAR
Limited • Employment opportunities.
• Raised about $1 billion
MARKET
LOCALISATION PENETRATION
• Robust team • Focusing on Tier 2 to Tier
• Targeting
hotels
unbranded
02 04 6 towns .
Restriction for hotel industry in China:

• Construction and operation of hotels is classified as a "restricted" industry under China’s

Guideline for Foreign Investment.

• Foreign investment in China’s real estate industry faces cumbersome restrictions.

• China’s highly regulated and tightly guarded internet space.

From Chandni Chowk to China:
• Thought process of Ritesh Agrawal
1. Choosing those areas where investment is easier
2. For every decision that the OYO team has to make in China, they ask, "What would the company
that was copying OYO do?," and plan accordingly.

• Customers Expectations in China: Chinese customers’ expectations tilt more towards having better
infrastructure at economy hotels.

• Operation and Delivery: OYO Jiudian (Hotels) operates like a Chinese company and delivers better living
for middle-income people across the country

• Bookings: Offline channels such as walk-ins, in the hotels it has signed up with. It also gets some bookings
through its call centre, Online channels such as WeChat (mini app) and Online Travel Agents are used.
• How OYO pays hotel owners: Follows Oyo’s Model 2.0 .

• Oyo CEO Ritesh Agarwal became Li Taixi

• Build a multi-dimensional, full-service value chain covering every aspect of travel: Partnership with Ctrip, ,
a Chinese integrated travel services company and Didi,  China’s ride-hailing giant

Tagline used: “Ride comfortably with Didi, stay comfortably with OYO”

• Targeting Millennials

• Localized Operations

• Oyo’s Standardization Policy: Providing interior and exterior refurbishments, rebranded signs, room
amenities, guest info system upgrades, management training and more
Results:
• OYO operates in 337 cities and has 500,000 rooms in the country

• Occupancy rates grow from 20-25% to 60-65% in a couple of months

• Happy Investors

• Largest hotel group in china

• Oyo’s China operations posted a $197 million loss between March 2018 and March 2019
 Thankyou
Group 2

Antara Kher
Riya Paul
Sakshi Puranik
Suyog Ladda