As China prepares for a protracted trade row, some officials and analysts are emphasizing a new round of reform and opening-up to create a new economic growth engine. These new reforms will likely grant broader market access to Indian companies like budget accommodation hotel chain OYO.
The Indian start-up began operating in China in November 2017, and it’s said to have become one of China’s top five players. The world’s second-largest economy is currently OYO’s biggest market, with 180,000 out of its 330,000 rooms globally.
While many budget hotel chains focus on China’s first- and second-tier cities, OYO is on a path to rapid expansion in the second- and third-tier cities.
By enabling standardization of services, the hotel chain operation gives OYO a competitive advantage over unbranded and independent hotels that previously dominated the markets in third- and fourth-tier cities.
In those less-developed markets, Indian firms are to some extent more adaptable than their Western counterparts.
There is the emergence in China’s third- and fourth-tier cities of an upper middle class. Increasing spending by cash-rich Chinese millennials – who are glued to their smartphones – means new business opportunities for Indian digital start-ups.
China’s digital economy is now equivalent to one-third of the country’s GDP, and OYO is a pioneer that’s trying to seize opportunities and bring its advantages into play.
India has witnessed exponential growth in its digital economy, with a surge of internet-related innovation and start-up activity. The digital economy is disrupting old models and serving as a bright spot in China-India economic cooperation.
China’s further opening-up of its market to foreign investment is a good development for India’s internet-related start-ups that are seeking an opportunity in the Chinese market. As an important area in China’s new round of economic reforms, opening-up of the digital economy will offer a chance for India internet-related start-ups to go global.
Following its success in China, OYO is eyeing the European markets. The five-year-old start-up is aiming to become the world’s largest hotel chain by 2023. With China’s opening-up serving as a springboard, who’s next after OYO?