India’s global startups – Ola and Oyo – are cautious about the geopolitical trends while they battle to overcome the challenges created by covid.
Speaking at the 47th National Management Convention of All India Management Association (AIMA), the founders of the two companies explained the global and economic situation of their businesses.
Mr Ritesh Agarwal, Founder and Group CEO, OYO Hotels & Homes, whose company is funded by Chinese investors and has business in China, is conscious about the perception of the company in both India and China. “Geopolitics is a big risk to global companies. Various countries are enacting policies that project companies as diplomatic enablers,” he says. His strategy to deal with the challenge is to be local in branding, staffing and culture while keeping the tech global. Mr Agarwal is confident that Indians see Oyo as a product developed in India. “However, we are watching the situation closely,” he says.
Mr Bhavish Aggarwal, Co-Founder & CEO, Ola sees the trend of digital companies getting embroiled in geopolitical tussles as an opportunity. “Global opportunities increasing for Indian companies because Indian enjoy more trust and respect overseas,” he says.
On the impact of covid, Mr Ritesh Agarwal says, “I had designed the business for 10% occupancy in a crisis but not for 0% occupancy.” However, he sees business coming back faster than expected. He says that Oyo hotels and homes in India are back to 40% occupancy, albeit but the occupancy in the leisure states of India, such as Himachal Pradesh, remains 20-25% because of restriction on entry. He says that in Europe occupancy is back considerably.
“Small is the new big after covid,” Mr Agarwal says. According to him, people are shunning large hotels and opting for boutique hotels and vacation homes. Also, the smaller hotels now need technology platforms like Oyo more than ever before, and Oyo had added 40,000 rooms each month during the past three months, he claims. “We can accept 50%-100% growth instead of 300% growth,” he says.
Ola founder is also positive about covid’s impact on transport business. “Covid has thrown up more opportunities than constraints for the long term,” he says. He expects people to move from public transport to personal mobility and Ola would be ready with electric cars for that.
Mr Bhavish Aggarwal claims that cab travel is returning quickly after unlocking, and office travel is back to 80% of the normal volume in Mumbai.
Both Ola and Oyo do not feel the need for additional funding because of covid, as the founders claim that they have enough capital. Ola wants to list its shares on stockexchanges in the medium term, according to Mr Bhavish Aggarwal. Mr Ritesh Aggarwal says that Oyo’s shareholders are not looking to sell in the current environment and they are with the company for the long haul.
Sunil Kant Munjal, Convention Chairman & Chairman, Hero Enterprise moderated the session.