Indian hotel chain operator OYO announces launch in China amid bruising competition (Updated)

The 5-year old startup counts SoftBank, Sequoia Capital, Lightspeed Venture Partners and Huazhu Hotels Group as backers.

Screenshot from OYO's app.

India’s OYO, a hotel chain operator, officially announced on Wednesday its launch in the Chinese market.

OYO, the abbreviation for On Your Own, brings online a large number of small hotels and allows travelers to book rooms using its app, guarantying basic services such as Wi-Fi, hot water, and clean towels.

 

Billion-dollar startup

Founded in 2013 by Ritesh Agarwal, OYO counts SoftBank, Sequoia Capital, Lightspeed Venture Partners and China’s fast-growing multi-brand hotel chain Huazhu Hotels Group as backers.

OYO claims it has 11k rooms across 26 Chinese cities including Hangzhou, Xian, Nanjing, Guangzhou, Chengdu, Shenzhen, Xiamen, and Kunming.

China is the third overseas market that the company has entered. OYO has already established its presence in Malaysia in early 2016 and Nepal in April 2017. In India, Malaysia, and Nepal, OYO’s service is available in a total of 230 cities.

The 5-year old startup was valued at USD6.8 billion after a strategic investment from Huazhu Hotels Group last year.

In March, Livemint reported that the startup had initiated talks with existing investors including SoftBank and two new investors to raise USD500-800 million in a new round, as the company seeks to beef up its presence in its home country and expand internationally. The UK and US may be OYO’s next markets to foray into.

 

Chinese market & bruising war

The market for online hotel booking in China reached RMB 121.96 billion (USD) in Q1 2018, up 37.8% quarter on quarter, according to a report by Chinese data service BDR.

Although the market is huge, China could be a tough market to crack for OYO as it will face a bruising competition with established hotel chains, including Jinjiang Inn and BTH Hotels that operates Home Inns.

 

KrASIA has updated the “Chinese market & bruising war” part of this story as per OYO’s request. According to the startup, it’s a hotel chain operator rather than an OTA, meaning it is not competing with Ctrip-like OTAs in China. 

 

Editor: Jason Zheng