Global Marketing

OYO’s Expansion into the Chinese Market

OYO (Oravel Stays Private Limited) was founded by a 19 year old, Argarwal, in 2012.  They are an India-based chain of leased and franchised hotels, homes, and living spaces.  At the time of the case, they were considered to be one of South Asia’s biggest, China’s top five largest, and the world’s fastest chain within the industry.  OYO started out with just hotels, but in 2017 they expanded their business into homes and townhouses with OYO Home and OYO Townhouse.  From 2013-2019, OYO was able to expand their services into 11 different countries worldwide, including India, China, the United Arab Emirates, and the United Kingdom.  OYO was in the business of taking old hotels, homes, and living spaces and upcycling them by putting an “OYO spin and twist” on them, which is what made them so successful.  It is easy for people to not go to the old and run down hotels, homes, and living spaces when they are traveling for work or fun and going on vacation, because people want a nice place to stay whether they are going to be spending a lot of time in the room or area or just a place to rest their head at night.

OYO had many different investors and venture capitalists which is what helped them expand into the many different countries worldwide and be extremely successful with it.  Some of those venture capitalists included UK-based SoftBank Vision Fund and US-based Greenoaks Capital and both of them believed that OYO could become a large player in several geographies (Ivey Publishing).  They would enter into different countries back-to-back with no stopping.  They were not too focused on quality, or the current customer base when first entering, which one would think would be a downfall or that OYO wouldn't be successful. This proved to benefit OYO because of the industry and style when they were upcycling old hotels, homes, and living spaces. OYO started its venture into international expansion in 2016 with Malaysia being their first market. In 2017, they expanded into Nepal and China. OYO joined forces with a Shanghai-based company called Huazhu Group Ltd. and OYO thought that since this company had so much experience in managing large properties that they would be able to help them expand further into China and become more successful in the Chinese market. They also joined another agreement with the China Lodging Group to help them expand even more. With these two partnerships, OYO was set up for great success in the Chinese market. OYO also made expansions to Middle Eastern Countries, the United Kingdom, the United States, and Japan.