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Business Today

Business Today 8-Mar-20

A leading business magazine read by the business leaders for staying ahead and managing challenges that comes right away in the ever changing world of business.

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Living Media India Limited
26 Issues

in this issue

2 min
oyo’s vulnerabilities

Entrepreneurship and entrepreneurs must be celebrated unquestionably. Their vibrancy keeps the lifelines of economies alive. Their highs and lows must be carefully choreographed for future generations to learn. Equally, their missteps must be minutely examined and their break points, ideally put under the microsope. At Oyo – founded as recently as 2013 – this and more is at work as the insanely fast-growing hotel chain goes through some harsh reality checks. Growth versus service quality; adversarial versus collaborative business partners; exploitative versus objective policies; and profitability versus expansion are just some of the glaring questions confronting founder Ritesh Agarwal and his team as the firm takes a breather and scales down its lofty ambitions and stiff goals. With sharp cuts in staff strength in two of its major markets –…

4 min
the digital drive

Retail e-Clearing Doubles In Just a Year From FY18 to FY19, value of retail electronic clearing went up 39%, but volume jumped 95% Volume in million Value in ₹ lakh crore Source: RBI UPI IMPACT UPI transactions crossed the one billion mark in October 2019. The growth in volume has been over 100% (y-o-y) in all months of the current fiscal. Pre-paid payment instruments are on the rise too, up 15% in October 2019 SWIPE RIGHT Digital payments accounted for 96% of non-cash retail payments (October 2018-September 2019). In three years, retail digital transaction volumes have grown at a CAGR of 61% (39% in value) RETAIL DIGITAL TRANSACTIONS Debit card transactions fall… In November 2019, number of debit card transactions fell in volume (12.5%) for the first time in over five years. The only other fall was in January 2018, a…

24 min
mystery of the oyo rooms

First, it laid off about 20 per cent of its 12,000-strong staff in India in end-2019, and cut down 5 per cent of the 12,000-strong workforce in China as part of a restructuring. In India, it pulled out operations from 200 of the 600 cities. Just as the world was coming to grips with the sudden scale-down at the fast-growing Oyo Hotels & Homes, more retrenchments were announced at the US operations. Meanwhile, the anger and dissatisfaction among hotel partners continues to swell. Reports suggest that nearly 500 hotel partners, of about 20,000, have snapped ties with the company since April 2019, alleging hidden charges and lack of transparency (though Oyo claims its partner churn is less than 1 per cent). On top of that, earlier this year, the Income Tax…

1 min
problem areas

The hospitality start-up has reportedly asked 10-15 per cent of its 12,000 India employees, and about 5 per cent of its 12,000 employees in China, to leave immediately This abrupt firing of employees has reportedly affected the morale of the remaining employees Delivery of services at Oyo hotels has been criticised by several customers as the company struggles to get its quality control right Several disgruntled hotel partners allege that Oyo is cheating them Deep discounting by Oyo has led to significant erosion of the unorganised hotel market The recent round of funding in October by founder Ritesh Agarwal and existing investors is believed to be driven by majority investor SoftBank aiming at higher valuation following the WeWork debacle…

1 min
why oyo is stretched too thin

In the last two years, it has gone beyond hotels, and diversified into co-living, co-working, vacation homes, tour packaging, cloud kitchen, weddings and cafes It’s expanding furiously in markets such as the US, Japan, Indonesia and the UK, and buying high-value assets there Its valuation has grown over 10 times in less than two years – from about $900 million at the end of 2017 to $10 billion in October 2019 Oyo entered the Chinese market in November 2017 and expanded rapidly. It claims to be the largest operator there SoftBank, known for jacking up valuations of investee companies, has reportedly pumped in about $1.5 billion in Oyo In just over six years of existence, Oyo claims to be a leading hotel chain in India and the world…

1 min
timeline of key events

2013 Launches in Gurgaon March/April 2015 Receives $25 million funding from Lightspeed India, Sequoia and others; launches app July 2015 Gets $100 million funding from Japan’s SoftBank 2016 Pivots from being an aggregator to being a hotel operator 2017 Enters the China market 2018 $5 billion valuation after raising money from SoftBank and existing investors; Oyo becomes a unicorn 2018 Establishes operations in the UK, Indonesia and Singapore 2019 Enters the US and Japan 2019 Ritesh Agarwal buys back shares, giving handsome returns to early investors Sequoia and Lightspeed Venture Partners 2019 Claims to be the second-largest chain of hotels and homes in the world…