Indian budget hotel chain OYO has only been in China for a little over a year, but it already considers China its second home. And with good reason. While it has spread across 250-odd cities across India, with over 8,000 hotels and 173,000 rooms in its half-decade-long existence, its growth in India is almost sluggish compared to what it has achieved in China.

340,000.

That’s the number of rooms that OYO currently claims it has in China. Nearly double its Indian inventory. And this despite only landing in China as 2017 was drawing to a close. The number of rooms in China may seem astronomical, but, as OYO’s China CFO Wilson Li explains, scaling is relatively easy as the Chinese market is 10X the size of India’s. It’s growth, he says, that is hard.

OYO, though, will not be deterred. If the SoftBank-backed hotel chain is to achieve founder Ritesh Agarwal’s stated goal of 2.5 million rooms by 2023, China will be key. And it took yet another step in this direction with its first acquisition in China this past week, snapping up its smaller rival, Qianyu.

Qianyu, which loosely translates to ‘Thousand Islands’, is a mid-range hotel chain with a similar model to OYO. It targets individual hotel owners, bringing them on board its platform and linking them under one cohesive brand. Launched in August of 2017, the company has nearly a thousand properties across more than ten cities in China, according to its website. An OYO spokesperson, however, told this reporter that Qianyu’s operations will remain independent. Interestingly, for a company that practically infests India’s larger cities, 80% of OYO’s properties in China are in Tier 3 or smaller cities.

OYO intends to continue its brisk and unrelenting march across China. Swallowing up individual hotels and small chains as it looks to recreate its omnipresence in India in a foreign market. But how did OYO get this far in China? And how does it intend to conquer a market that, as Uber and Amazon can testify, is notoriously hard to break into for outsiders?

Finding bearings

OYO doesn’t try and hide its Indian origins. However, the way it’s run makes it seem completely local on the ground. “I couldn’t quite believe it when they told me the company was Indian,” said a security guard at a newly-branded OYO hotel in the port city of Tianjin. He had worked at the same hotel for decades before the owner decided to join OYO in August of 2018. OYO has about 6,000-odd employees in China, the vast majority of whom are local.

“I believe we are a Chinese company,” says Li. “There’s no hierarchical relationship between us and India. The decision-making is completely separate.” Structurally, the company is completely separate from the Indian entity.

AUTHOR

Huizhong Wu

Huizhong Wu is a journalist based in Beijing. She was previously a freelance journalist based in New Delhi. She has written for CNN, Foreign Policy and Wired, among others.

View Full Profile

Available exclusively to subscribers of The Ken India

This story is a part of The Ken India edition. Subscribe. Questions?

MOST POPULAR

Annual Subscription

12-month access to 200+ stories, archive of 800+ stories from our India edition. Plus our premium newsletters, Beyond The First Order and The Nutgraf worth Rs. 99/month or $2/month each for free.

Rs. 2,750

Subscribe
 

Quarterly Subscription

3-month access to 60+ new stories with 3-months worth of archives from our India edition. Plus our premium newsletters, Beyond The First Order and The Nutgraf worth Rs. 99/month or $2/month each for free.

Rs. 1,750

Subscribe
 

Single Story

Instant access to this story for a year along with comment privileges.

Rs. 500

Subscribe
MOST POPULAR

Annual Subscription

12-month access to 150+ stories from Southeast Asia.

$ 120

Subscribe
 

Quarterly Subscription

3-month access to 35+ stories from Southeast Asia.

$ 50

Subscribe
 

Single Story

Instant access to this story for a year along with comment privileges.

$ 20

Subscribe

Questions?

What is The Ken?

The Ken is a subscription-only business journalism website and app that provides coverage across two editions - India and Southeast Asia.

What kind of stories do you write?

We publish sharp, original and reported stories on technology, business and healthcare. Our stories are forward-looking, analytical and directional — supported by data, visualisations and infographics.

We use language and narrative that is accessible to even lay readers. And we optimise for quality over quantity, every single time.

What do I get if I subscribe?

For subscribers of the India edition, we publish a new story every weekday, a premium daily newsletter, Beyond The First Order and a weekly newsletter - The Nutgraf.

For subscribers of the Southeast Asia edition, we publish a new story three days a week and a weekly newsletter, Strait Up.

The annual subscription will get you complete, exclusive access to our archive of previously published stories for your edition, along with access to our subscriber-only mobile apps, our premium comment sections, our newsletter archives and several other gifts and benefits.

Do I need to pay separately for your premium newsletters?

Nope. Paid, premium subscribers of The Ken get our newsletters delivered for free.

Does a subscription to the India edition grant me access to Southeast Asia stories? Or vice-versa?

Afraid not. Each edition is separate with its own subscription plan. The India edition publishes stories focused on India. The Southeast Asia edition is focused on Southeast Asia. We may occasionally cross-publish stories from one edition to the other.

Do you offer an all-access joint subscription for both editions?

Not yet. If you’d like to access both editions, you’ll have to purchase two subscriptions separately - one for India and the other for Southeast Asia.

Do you offer any discounts?

No. We have a zero discounts policy.

Is there a free trial I can opt for?

We don’t offer any trials, but you can sign up for a free account which will give you access to the weekly free story, our archive of free stories and summaries of the paid stories. You can stay on the free account as long as you’d like.

Do you offer refunds?

We allow you to sample our journalism for free before signing up, and after you do, we stand by its quality. But we do not offer refunds.

I am facing some trouble purchasing a subscription. What can I do?

Please write to us at support@the-ken.com detailing the error or queries.