Abstract

The case is about the international expansion strategy of Gurugram (India) based Online Hospitality Company,OYO Rooms (OYO). In September 2018, OYO check into the Unicorn Club with a funding of $1 billion led by SoftBank Vision Fund, Sequoia Capital, and Lightspeed Venture Partners. The fresh round of funding was expected to boost OYO’s business in China and in other international markets. In May 2018, OYO entered in China, setting a rare example of an Indian consumer technology company setting up operations in the second-largest economy in the world.With this move, OYO was set to compete with well-established players in the country like Jinjiang Inn and Home Inns. In 2011, Oravel Stays Pvt. Ltd by Ritesh Agarwal, as a platform to enable listing and booking of budget accommodation. In 2013, the company was named as OYO Rooms. Backed by a number of investors the company continued to raise funds and expand. Over the years, OYOforayed intoMalaysia and Nepal. OYO’s China operations clearly indicated the big bet OYO has placed on foraying east.Further, it had been speculated that OYO was also planning to explore the US and UK markets as well. The case discusses the growth and expansion of OYO in China and the challenges it was likely to face in that highly competitive market. With the arrival of OYO in China, it remained to be seen how the rival companies would respond and whether the company will be able to compete and sustain.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand the hotel aggregation business
• Study the franchise strategy in aggregation business
• Examine the importance of fundraising for a startup

Keywords

OYO Rooms; Inception and Growth in India; Overseas expansion; Business Model; Entry in China; Scaling up; Opportunities and Challenges; Startup; Fundraising; New product / service development; Global Expansion