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OYO to focus on 5 core markets amid COVID crisis, says group CEO
Hospitality firm OYO Hotels and Homes plans to focus on its five core markets -- India, Southeast Asia, Northern Europe, China and the US -- and not expand to new markets in the aftermath of the COVID-19 pandemic, a top company official said.
The company, which saw its gross margins fall sharply after the outbreak of COVID-19, said its gross margins are now back to 85 per cent of the pre-pandemic levels.
"Crisis brings clarity. For us, the clarity that this (COVID-19 pandemic) has brought is that we have clear visibility..we operate in around 80 countries..our core three regions where we are market leaders or market leading in are India, Southeast Asia and Northern Europe and two markets where we are becoming clear challengers are China and the US. These are the five focused markets we are going after. "Within these, our aspiration is wherever we are market leading or market leaders we want to expand our lead by going deeper rather than that of broader. In markets such as the US, China, we want to continuously improve our products and services to win market share. We are broad enough to not have to expand any more," OYO founder and group CEO Ritesh Agarwal said at FICCI Global Young Leaders Summit.
Currently the focus is to make sure that the company consolidates gains and goes deeper in geographies where the group has market leadership or the challenger status, he added. Agarwal said the company saw its gross margins dollars fall by upwards of 66 per cent in the month of April versus January and it had to take several tough decisions including letting go of many employees.
"We are now back to 85 per cent of pre-COVID levels in gross margins dollars, still 15 per cent down, we are not fully out of the woods yet.. clearly we are in much better condition than we were in April," he added. Agarwal said he has been through much more challenging times and the crisis caused by the COVID-19 pandemic does not scare him.
"When you have USD 1 billion cash in your bank, you have thousands of OYOpreneurs willing to fight and see through this crisis together, you have a consumer ecosystem of 100 million users... Pandemic may feel like a big challenge but that is not as big as when you have one week of cash left when you are starting your company...that is every week of survival you are fighting for....These days don't scare me as much," Agarwal said.