Co-living has emerged as a concept that offers convenience, community and cost-effectiveness, especially to thousands of millennials who move to cities. OYO Life, an OYO brand, is one of the latest and big entrants in this market. According to a recent report released by real estate portal PropTiger, the co-living business is set to grow into a $93-billion market in India. OYO Life aims to conquer a huge chunk of this market with its end-to-end services. Rohit Kapoor, chief executive officer, new real estate businesses, OYO Hotels & Homes, talks to Srinath Srinivasan on how the company is aiming to disrupt this space amid growing competition.
How do you position OYO Life among other brands in the market? Have you ventured late into this business?
Co-living as a market is basically long-term rental. Today, there are around 1 lakh beds in the organised living space in India. This is disproportional, given the number of people who migrate to the cities looking for a place to stay, which is around 55 million a year. We are focused on what we can do independently rather than compete with others. We are in four cities, Bengaluru, Gurgaon, Noida and Pune. By the end of 2019, we aim to be in 10 cities with over 1 lakh beds. We aim to be the largest brand in this segment within this financial year. This is possible because of the existing technology infrastructure we have over the scale of OYO’s operations and our ways of forming partnerships. We can acquire supply at a really cheap price and at a speed that others can’t match.
Will there be any specific technological innovation to support this business?
There will be a 20-30 % customisation to our existing systems. Technology will be customised on the customer side. The simple fact that OYO Life is a long stay will make our customer care system work differently. Other areas will include customer engagement and community programmes.
What will be the customer acquisition strategy for OYO Life?
We don’t spend much on marketing. Our main channel for acquiring customers is via our website. Customer referrals are another important channel. It is a big programme. Third is the offline broker channel. The customer pays no brokerage. We use that channel to get leads. Lastly, we do a lot of B2B tie-ups — companies which are looking to provide options for their new employees to stay closer to the office. We are also building campus channels for students graduating from college and university campuses. Our OYO app also helps market OYO Life.
Grievance redressal seems to be a major problem. It has affected other brands in the past on social platforms. How do you plan to address this early in your business?
We focus on few things but we make sure we do them right. For our operations and customer experience, we make sure we hire only the best senior executives. As much as 80 % of our budget is spent on training and developing ground-level staff and caretakers. They are the important stakeholders in improving customer experience. It is also our biggest challenge to get the right talent at every level. We are adding 200 people a month. We are building city level command centres to mobilise services at the micromarket level. For every five buildings, there’s an operations manager to address issues as and when they arise. R&D projects are going on which are focused on improving safety in the buildings. Also, we have a 100% inventory and this differentiates our business model from others, giving us end-to-end control and fast response time. I believe all these are not done by anyone else in the market at the moment and it will significantly avoid problems for us.