OYO has been playing aggressively in global markets, particularly in China. The SoftBank-backed company claims the largest inventory of 3,60,000 rooms across China. To ramp up its operations in the country where many stalwarts including Amazon and Uber had to retreat, OYO has acquired a smaller rival Qianyu.
“The transaction had completed last week and it would mark the first acquisition of the company in the country,” said two sources aware of the matter. Sources point out that the acquisition would help OYO to accelerate its expansion and gain local talents and expertise.
Entrackr has sent queries to OYO. We’ll update the post as response comes in.
Qiayu claims to be a midscale hotel brand that follows the franchise model to bring hoteliers under the brand. Just like OYO does in India, the Chinese firm renovates existing properties, give its brand and pool in bookings for them through OTAs.
Qianyu is backed by Xu Xiaoping’s Reality Fund, Gaochun Capital, Ali’s Yuanhao Capital, and Didi’s investor Wang Gang. “Following the acquisition, they are taking the exit from the company,” added sources based out of China. Sources requested anonymity as they aren’t authorised to speak to the media.
According to a Chinese news portal CaiJing, Qianyu has thousands of rooms in many cities including Beijing, Shanghai, Chengdu, and Xi’an.
OYO had entered the Chinese market in November 2017 and claims to have 11,500 employees. While it has employed 5,500 people directly, remaining 6,000 are on contracts. With an inventory of 3,60,000 rooms, it has 7,400 hotels across 298 cities in China.
The acquisition of Qianyu comes on the heels of a couple of recent acquisitions of coworking space provider – Innov8 and Weddingz in India. Entrackr was first to report about OYO’s China launch as well as Innov8 take over.
On the lines of Chinese entrepreneurs and professional who adopt Indian names for better name recall, OYO’s founder Ritesh Agarwal is called Lei Taixi.
While Qianyu doesn’t seem to be a large scale hotel brand, it would certainly help OYO to gain local expertise, more inventory and experienced team. Aspiration of OYO in China is lofty and it intends to repeat success on the lines of food and beverage giants – KFC and Starbucks.
Both companies follow the franchise model (OYO follows the same model) and are extremely successful in the Chinese market.