9 cities, 40k beds, 6X growth: CEO Rohit Kapoor looks back on OYO Life’s milestones as it turns one
In a conversation with YourStory, Rohit Kapoor, CEO of OYO Life, looks back on the last year, reflecting on the evolution and growth of the co-living segment in India.
In October 2018, Gurugram-based hospitality unicorn OYO announced its entry into the co-living segment with OYO Life. From late 2017, the company has been transforming itself into a real-estate hotels and homes brand, and has been focused on diversifying into different verticals.
OYO Life was one of the later entrants in the co-living space, and has been competing for a year now, with the likes of Tiger Global-backed Nestaway and other startups like Zolo Stays, and Stanza Living.
In an interaction with YourStory, Rohit Kapoor, CEO, New Real Estate Businesses, OYO, speaks about the brand and as well as the evolution of the co-living segment. Rohit joined OYO in December 2018 after spending a decade in consulting firm McKinsey, and eight years at Max Healthcare where his last position was Executive Director.
A keen long-distance cyclist, an avid traveller, and photography enthusiast, at OYO, Rohit looks after new business initiatives like Oyo Life, and OYO Workspaces, the brand’s co-working segment.
He speaks of building a team that is “disproportionately focussed” on the consumer to stay ahead of the curve.
Edited excerpts of the interview:
YourStory: It has been a year since OYO Life began operations in India. How has the journey been?
Rohit Kapoor: The year has gone by really fast, and what has been great for our team is that consumer acceptance of the brand and experience too has been good. We feel like consumers were waiting for something like this in the market and now that it is here, they are just lapping it up.
We started with one city and now are in nine cities - Delhi, Gurugram, Noida, Bengaluru, Chennai, Hyderabad, Mumbai, Kolkata, and Pune. We have over 40,000 beds and have grown 6x since starting operations. We have over 700 properties across the nine cities. It typically takes three months for one building to be filled.
There are over 95 percent repeat users. OYO Life today is being used by different people - students and artists too coming and setting up shop, as there is focus on minimalism and not owning any asset.
It gives them the freedom and space they need and also eliminates the hassles of dealing with brokers, brokerage, lock-in periods, houses with little or no amenities, maintenance charges, housekeeping services, and security deposits, which can be a costly affair. And there’s no lock-in period. So, you don’t have to worry if you get transferred to a different city in three months or if you change jobs and need to move to another locality.
OYO Life charges Rs 5,999 and goes up to Rs 13,000 for a single occupancy. The median currently falls at Rs 7,000.
YS: What is your take on the co-living market? And how operational intensive is the business?
RK: There are pros and cons in the operational complexity in every business. Also, there is a focus on long stay. An advantage to co-living is that many things that need to be taken care of are done so by the community as people start living together.
But in India nothing is taking for granted; we are an operationally tough country. You have to make sure that electricity and water are running, cleaning takes place on a daily basis, and the internet is provided.
There are multiple factors I look at for operations, one being if I have the right team in place.
For example, our Head of Operations is ex-Army and an ISB grad. Having spent nine years in the army, he has seen the toughest of situations. And his B-school training gives him perspective on business. So, when he runs ops, you know the challenges will be handled. Right leadership is therefore important.
Secondly, how do I leverage and harness technology? For example, tracking housekeeping cannot happen on foot. An app-based system helps to keep those checks and balances in place.
There are a lot of investments we can make because of the 50-member tech team working at Oyo Life. Today, we are a team of over 1,000, including the ones in the field.
You also need to focus on deploying the right people on the ground and continuously training them. I often say that the last-mile person who is interacting with the consumer is the brand. I can say anything to the media or in a room, but what that person does translates into day-to-day action. Thus, you have to help that person grow and understand the core business.
People are thinking far more about experiencing life than just about owning things: Rohit Kapoo...
YS: OYO was a relatively late entrant in the market. How do you ensure that you set yourself apart? Does having deep pockets help?
RK: The overall market is $50 billion, and the entire organised industry hasn’t tapped more than $100 million. So we haven’t even scratched the surface. I have immense respect for all the competitors in the space, as we are opening up the market and space.
Today, we have the density that provides for the demand. Also, we aren’t an aggregator or a web platform. We are a full-stack provider that partners with asset owners to provide end-to-end solutions. OYO takes on lease an entire building, transforms it, controls inventory, and manages operations, end-to-end, to offer a superior co-living experience, replete with break zones, community gaming, and interaction areas.
And as I keep telling my team, it is best to focus on what the consumer wants and work towards providing it rather than on what the competition does.
YS: What are the key findings of what your consumer wants and how have you worked towards providing it to them?
RK: There are different nuances. Let me give you an example: people have a craving for midnight snacks, so putting up a vending machine helps. Or many would want a grocery store option later at night, and partnering with a BigBasket comes in handy here. The partner ecosystem today is strong so providing for consumer needs isn’t difficult.
For example, in our coworking space in Gurugram, you can drop your laundry off in the morning and pick up fresh laundry in the evening. These are examples of small, practical needs that people have at a co-living or coworking space. You need to talk to the consumer to understand them.
I just want my team to be ‘disproportionately focused’ on listening to the consumer and providing for their needs.
YS: What is OYO Life’s focus now?
RK: In terms of product categories, we are definitely looking closely at student accommodation. It currently makes up 20 percent of the total accommodations of OYO Life. We are focussing on distinct offerings, and have started partnerships with institutes like IIT Delhi for the same.
We are also looking at variants of partnerships with asset owners. The core remains similar: focus on density to give more choices to the consumers and provide the right value to the asset owner.
(Edited by Evelyn Ratnakumar)