Oyo’s recent acquisition spree in domestic market has been least surprising given that it is sitting on a huge pile of cash. But to pull of an acquisition in a highly competitive market like China certainly makes for an aggressive move; especially in the context of Oyo’s continuing quest for international expansion.
According to Entrack, Oyo may have given a real head start to its international expansion as it seals its first major acquisition in China. The online publication claims that last week the SoftBank backed company had acquired China’s midsize hotel brand ‘Qianyu.’ However, Oyo is yet to confirm this news while other media reports claim that the talks are still on; hinting that the acquisition deal is still not sealed.
If this acquisition deal does go through then it will be Oyo’s first major acquisition in China. It will also be company’s second major acquisition of the year, after having reportedly acquired co-working company Innova8 only few weeks back.
Any acquisition move in China will assume huge significance for Ritesh Agarwal helmed company. Primarily because it attaches huge importance to China; something that is clearly reflected how quickly it has expanded across the country in a very short span of time. Entered in December 2017, today the Gurgaon headquartered startup operates more than 5,000 hotels and 2, 60,000 rooms across the Asian country.
Going by sheer market size then China – after India – is Oyo’s largest market. The company also has presence in other international markets like Malaysia, Nepal, the UK, UAE, Indonesia, Saudi Arabia, Philippines and Japan. But the company has comparatively made very tepid progress in these countries, which again underscores the importance of China.
However, making stride in a ruthlessly competitive market like China won’t be easy and this partly explains Oyo’s need to fuel growth through inorganic method.