NAME:-> AKASH BISHT New Age Business Model Case Study_OYO_Assignment

Questions:

 Explain OYO Business Model and how it generates revenue?

 Investments secured by OYO.
 Marketing Mix in detail: 4Ps

Answer 1:->

Company:-> OYO ROOMS || Founder-> Ritesh || Founded-> 2013.

Business Model -> (From hotel aggregator to Franchise)

1. It leases rooms and sell them under its brand name. This is called hotel
aggregator. They have now partnered with hotels, to operate as a franchise.
So, hotel aggregator business model has changed into a franchise model.

So, the following points can be concluded:->

 Lease a part of Hotel’s inventory and organizing under OYO brand name, but
now they ask hotel partners to operate them as franchise.
 Hotels provides service to hotels as decided via contract and bookings are
made through the mobile app/website.

How does OYO make money/ generate revenue?

 Charges 22% commission every month from owners. It depends upon the
features and services.
 There is an OYO wizard membership plan that charges fees from 500 Rs to
3000 Rs.
 They place ads on their apps, and websites. So, it costs various companies to
put their ads.
 They put charges from sponsors and key partners.
 Also, it operates as a business consulting services, i.e., to provide clients to
the organization.

In 2019, OYO revenue increased 4.5x over 2018, reaching over $951 million: -

(credit-> https://fourweekmba.com/, https://bstrategyhub.com/)

NAME:-> AKASH BISHT New Age Business Model Case Study_OYO_Assignment

Answer 2:->

(credit:-> data source from Wikipedia, crunchbase)

OYO secured the following investments in past:->

From October 6, 2016 till Dec 10,2019.

OYO has raised a total of $3.2 billion in funding over 16 rounds. OYO is funded by
22 investors.

In September 2018, OYO raised $1 billion, of which the RoC filing for the amount of
$100 million was raised from Start Virtue Investment Ltd.

In October 2019, Series F funding of $1.5 billion led by Softbank Group, Lightspeed
Venture Partners and Sequoia India.

In Feb 14, 2019 and December 7,2019 OYO raised $100M (same amt.) from Didi
Chuxing and Grab.

A table can be summarized as follows:->

Announced Money Lead

Date Raised Investors
Dec10, 2019 $1.5B Ritesh,
Softbank
Nov 30, 2019 500M MyPreferred
Transformation
April 1, 2019 $75M Airbnb
Feb 14, 2019 $100M Didi Chuxing
Dec 7, 2018 $100M Grab
Sep 25, 2018 $1B SoftBank
Vision Fund
Sep 12, 2017 $10M Huazhu Hotels
Group
Sep 7, 2017 $250M SoftBank
Vision Ltd.
Sep 1, 2017 $10M -
Oct 6, 2016 $20M InnoVen Capital
NAME:-> AKASH BISHT New Age Business Model Case Study_OYO_Assignment

Answer 3:->

4 P’s Product, Place, Price and Promotion.

Product ->

They improved and standardized hotels, villas , guesthouses, and improving and
bringing additional features to them. These small things has got a lot of potential in
them. Oyo managed to aggregate all these small and unknown hotels and help them
put in them into their app.

Place->

In OYO, they don’t own anything in terms of asset like property. But instead the
improved into management and their qualities and help them grow. They have
captured maximum markets like rooms near railway stations, airports, residential
areas, from small places to high-fives. It becomes easier for people now to trust
these local rooms via OYO.

Promotion->

They focused on mass digital marketing targeting potential future customers based
on their interests. They highly promoted ads on various platforms, such to create
awareness of OYO to people and building a trust among them.Their ads are as
creative and interactive.

Price->

OYO targets from all range of customers having price 1K Rs. approx. to 8K Rs,
because if the price are satisfactory then customer will again book a room only via
OYO. This is for Sure. They also target rich customers to provide excellent facility
but that comes with cost, that customers are ready to pay on.