Kishore Biyani says Future Group will use FabFurnish’s online platform and delivery model to grow presence in markets with no offline stores
Gurugram-based hospitality startup OYO has shifted its business model from hotel aggregation to franchise. OYO now runs pure-play franchise business allowing hotel partners to run under the OYO brands.
SoftBank-backed OYO had introduced franchise model in May last year. “In the last two years, we have evolved our business to 100% exclusive franchise, manage or operating. We do not anymore do hotel aggregation and have become a full-scale hospitality company,” OYO CEO Ritesh Agarwal said.
As per the company, the hotels that were part of the hotel aggregation model have now been converted into the franchise. OYO’s plan to shift from hotel aggregation to franchise model came mainly to reduce its operational costs and to improve serviceability, the company stated.
Founded by Ritesh Agarwal in 2013, OYO currently operates over 70K rooms in 230 cities in India, Malaysia, and Nepal. The hotel aggregation and booking platform recently raised $10 Mn from China Lodging Group, and $250 Mn from SoftBank Vision Fund in Series D funding round. The round also saw participation from Hero Enterprise and other existing investors Sequoia India, Lightspeed Venture Partners and Greenoaks Capital. The company has raised over $551.6 Mn so far.
OYO Opens New Tech Development Centre In Telangana
To leverage technology expertise in the background, OYO has also opened a tech development centre in Hyderabad. The Centre will be responsible for management and development of various verticals, including holiday packages, sales technology along with products and solutions for corporate travel and travel agents.
It will focus on building supply chain technology and transformation technology teams, growing to 300 engineers by 2018-end, read the company statement.
Ritesh Agarwal, founder & CEO, OYO stated, “OYO is at the forefront of transforming India’s hospitality experience. Technology has been the biggest driver towards our growth and expansion in the last four years. This new Centre of Excellence for Machine Learning (ML) and Artificial Intelligence (AI) initiatives will help us consolidate our technology leadership. Additionally, strategic partnerships with NITHM and TSTDC will not only impart skilling, but also create gainful value for the industry at large.”
After Gurugram, this is OYO’s second tech development centre. The facility in Hyderabad will focus on developing innovative products for customers, partners and employees. The company is also in discussions with National Institute of Tourism and Hospitality Management (NITHM) to boost employability in the hospitality sector by leveraging OYO’s expertise in the hospitality segment to develop a hybrid learning program.
Also in the works is an alliance with Telangana State Tourism Development Corporation (TSTDC) to maintain, market and promote select properties under the corporation.
Anil Goel, Chief Technology Officer, OYO added, “Technology has been a core differentiator for OYO and our investments here are to ensure we remain future-ready. Our intent is to create value for all aspects of hospitality operations. We will leverage technology across all operational channels, from recruitment to management to training, in addition to customer engagement. We are excited about using machine learning techniques to understand the behavioural patterns of customers, which in turn will enhance customer experience and drive essential business metrics such as conversion and repeat rates.”
Having raised huge funding, OYO is working on the several fronts. While the company is trying to enter the Chinese market, particularly Hongkong where Indians visit in good numbers, through its latest Investor China Lodging Group, OYO has recently also ventured into new territory through OYO Asset Management. The service is geared towards building a nationwide network of hotels through a partnership with real estate asset owners.
The company also partnered with another online hotel and travel booking platform Yatra Online to widen its access to customers.
A couple of other startups that are currently active in hotel aggregation or budget accommodation space are RedDoorz, Wudstay Hotels, FabHotels, Treebo Hotels and GoStays. In July 2017, OYO had claimed that its GBV run rate has touched the $400 Mn mark in its financial results for the years 2015-2017. With the backing of SoftBank, the company has already made Tata Group’s budget hotel brands Ginger hotels to relook its entire pricing structure in the post-OYO era. Let’s see how the franchise model turns up for OYO.
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Bhargav Dasgupta , MD & CEO, ICICI Lombard, says if there is an inorganic opportunity that we find valuable, we might look at that and if for that we need capital that is a different story altogether.
The ICICI Lombard got listed on the stock markets today. What does it mean for you?
It is an exciting event for us and we are really looking forward to this journey as a listed company. We built a franchise over the last 16 years which has become the leader in the private space not just in terms of premium but in terms of the other aspects of business. Going ahead, we also need to focus on building on this leadership platform and continue to provide value to our new stakeholders who are our shareholders.
At a valuation of close to about Rs 30000 crore with the listing price between Rs 651 and Rs 661, do you feel that perhaps the issue was a bit overpriced considering that the stock did list at a slight discount? How would you understand the listing price and what do you expect going forward as far as investors who bought the stock is concerned?
What we were most heartened by was the fact that the long-term investors who are aware of the value of the franchise that we built gave us the valuation that we got. So, the 30000 crore valuation was based on socialising the issue with long investors, long in QIB and the FIIs and the DIIs. In terms of the pricing, I would believe that investors who are looking at long-term investment, would see value in this franchise even today because the underlying opportunity in general insurance is huge.
If you look at the under penetration, the density of our numbers are one-tenth of China, so there is a huge runway of growth. Within that, we have built a franchise which stands apart in terms of quality and if there is a company that can take advantage of that opportunity going ahead, we believe we can. We remain optimistic about the quality of investment that we have had and the fact that they are really long-term investors. We believe that for them, over a longer period of time, this will be a very good investment.
Also there is a thick pipeline as far as other insurance companies in the general insurance space are concerned. We have New India Insurance General, GIC all are looking to list very soon. What will it take to maintain your leadership position in terms of valuation and also in terms of how you continue to remain attractive to investors considering that we do expect more offerings in the general insurance space?
Globally, insurance is the core part of any economy. In most of the markets you will see a number of insurance companies in the top 10, top 20 companies. So, having four-five companies from insurance is not a large number in the context of India. Coming back to your specific question on where we see our leadership position at the end of the day, we have been able to build this leadership position with certain focus strategies that we have adopted one fundamentally a focus on customers. At the end of the day the entire organisation is geared up towards servicing its customers well and we believe that if you want to create an institution, if you focus on customers they will reward you in terms of the leadership position that you can create so that is something that we will continue to focus on.
General insurance of course has exponential growth prospects in India. As you have mentioned, the market is under-penetrated but at least for the next six months, there is some concern about India’s economic growth. This is a short to medium term story. According to experts and economists, because the long term potential of India is intact, one wonders your strategy for growth in the next five years considering that we do see some structural cracks in the economy. The investments cycle is not kicking in, GDP is at 5.7% last quarter compared to last year and there is concern about growth as well. In this background, how do you read the prospect in the next five years and what will be some milestones that you will need to crack in the coming five years based on the strategies you want to put in place?
We get over worried about short term news and we let it cloud our judgments. If you look at a longer term journey for India and within that in insurance. What we would focus on would not at all be coloured by the headlines that we see in terms of some structural issues with the growth numbers in this quarter or the next quarter. We remain extremely optimistic and bullish about India over a long period of time and we remain extremely optimistic and bullish about general insurance as a sector.
We are building this franchise not for the next quarter, we are building this franchise for the next 100 years and that is what we will continue to focus on and strategies that we have adopted I do not see a need for a radical shift in any of those strategies. What some of these events give us is an opportunity for dislocations in the market which gives us opportunity as long-term players to enter segments that we probably could not enter in the past for multiple reasons so we see these are positive opportunities for us.
What would the new structure look like for shareholders? The last time when we spoke you mentioned that you hoped to welcome a whole new range of investors. What will ICICI Lombard look for this fiscal in terms of investor shareholding and going forward would you be looking to bring in one more partner with more shareholding considering the capital intensive nature of the business?
In terms of the capital for us as you know this is an offer for sale. We did not get any capital but it is also because we do not need any capital. In solvency, we are way ahead of the regulatory requirement. If I look at our growth plans over the next five years and the profit growth that we are seeing as a company, we do not see the need for dilution. So, there would not be a need for capital infusion for our organic business. If there is an inorganic opportunity that we find valuable, we might look at that and if for that we need capital that is a different story altogether.
British luxury men’s footwear and accessories brand Harrys of London is planning to open its first outlet in Delhi, followed by Mumbai by early 2018
New Delhi:British luxury men’s footwear and accessories brand Harrys of London is entering India.
The designer leather brand is planning to open its first outlet in Delhi, followed by Mumbai by early 2018, a top executive at the company said.
Founded in 2001, Harrys of London is present in more than 20 countries. The company is looking for franchise partners in India.
“India is an important market for us. Our target group is businessmen and travellers between the age group of 25 and 60 years. Our collection ranges from contemporary London and formal footwear to sneakers and casual footwear,” said Steven Newey, chief executive officer at Harrys of London.
Apart from footwear, the company also sells travel bags, wallets, shoe-care products, scarves and belts.
Over the next five years, Harrys of London is planning to open five to six stores in India and is expecting to earn 1 million pounds per store. “We have been growing at an annual rate of 20-25%. We sell 25 pairs of footwear every month, on an average. In five years, India (operations)will be able to earn 5-6 million pounds,” said Newey, without divulging the overall revenue of the company.
A typical Harrys’ store in India will be spread over 1000 square feet. The company also sells its products online through its own e-commerce platform www.harrysoflondon.com.
Harrys footwear is designed in the UK and manufactured in Italy. Going forward, Harrys is also planning to enter New York by the end of this year.
The branded footwear market in India is currently estimated at Rs 20,000 crore, 60% of which is men’s segment, according to data from consulting firm KPMG.
While the branded market is currently dominated by old footwear brands like Relaxo, Liberty and Bata, much of the footwear segment in India is unorganized. However, with the increasing disposable income and brand awareness, there has been a shift towards the branded footwear space. At present, the men’s footwear segment is growing at a rate of 10%, while the women’s category is growing at 20%, according to KPMG.
Insiders told THR at the time that Miller exited the project over creative differences with star Ryan Reynolds, and when asked if we can thank Reynolds for Miller’s upcoming Terminator movie, the director responded with joking reluctance, “Yeah, if you want.”
“I felt like there was more stories to tell there, but I’m happy that somebody else is telling them,” Miller said of Deadpool 2 during a conversation moderated by The Hollywood Reporter‘s editorial director Matthew Belloni that is the centerpiece for this week’s THR cover story. “There was a sense of relief in that I get to do something new versus Deadpool 2. I think it would’ve been a great movie, but it was also going to be a continuation of what we had done. This really gave me a chance to do something new.”
Miller, who is working with producer James Cameron on the Terminator movie, also addressed why he chose to direct another film based on a pre-existing property following Deadpool. The film will follow Cameron’s Terminator (1984) and Terminator 2: Judgment Day (1991), while ignoring the three films Cameron was not involved with.
“I feel like there was so much more to be done with these characters,” he said of the Terminator franchise. “I mean, I wanted to make Deadpool 2. I was going to do that, until I wasn’t. So, there was that, which took up about seven months of my time. But even then, David [Ellison, who has the rights to the Terminator franchise] and I were talking, like after Deadpool 2, it was going to be this [Terminator].”
Cameron, who is currently filming the first of his four Avatar sequels, revealed that he read Miller’s Deadpoolscript several years before the Fox film got made. The risky R-rated movie needed all the help it could get to score a green light, and Cameron did what he could after reading the script.
“And the next day, he’s like: ‘Oh, they should be making this movie. I’m going to call somebody. Don’t tell anybody, but I’m going to call somebody,'” said Miller.
Deadpool was a big hit when it was released in February 2016, going on to be the top-grossing X-Men film of all time with more than $783 million worldwide.
David Leitch is directing 2018’s Deadpool 2, which features series newcomer Josh Brolin as Cable. For his part, Reynolds has said of Miller, “I’m sad to see him off the film. Tim’s brilliant and nobody worked harder on Deadpool than he did.”
Chennai, September 24: Chili’s India (South and West) to open three more restaurants in India by the end of the year at an investment of ₹5 crore a restaurant.
Chili’s Grill & Bar is an American casual dining restaurant chain that features Tex-Mex-style cuisine. The company was founded by Larry Lavine in Texas in 1975 and is currently owned and operated by Brinker International.
At the launch of second Chili’s outlet in Chennai, Ashish Saxena, CEO, said the company to open two in Mumbai and one in Bengaluru by December 2017. There are 15 Chili’s restaurants in West and South India.
Chili’s India is operated by Tex Mex Cuisine India Pvt Ltd, which is franchisee of the US-based restaurant chain Chili’s Grill and Bar for the West and South India. TVS Capital Funds is a major investor in the company. Though the restaurant chain witnessed drop in sales post demonetisation and GST, Saxena feels that the expansion helps company reduce operation costs. The company was able to cut down its imports by more than 30 per cent thanks to the growing local supply-chain in the last four years. In addition to their regular menu, the company offers a nutritional menu, allergen menu, and vegetarian menu.
According to Saxena, all this was possible because of growing popularity for American cuisine that involves grilled dishes. Gopal Srinivasan, Chairman, TVS Capital Funds, said in a market research done by the company few years ago Chinese, Italian and Mexican cuisine top the list of the most favoured food in India since they have flavours that are similar to Indian cuisine.
“This offers a lot of potential. I think South and West India alone can account for 150 Chili’s restaurants,” he added. The company registered a revenue of ₹62 crore and expects to close next fiscal with ₹95 crore. So far, ₹75 crore investment has gone into the expansion.
Kolkata-based Keventer Agro Ltd, a group outfit of the ₹1,800-crore Keventer Group, looks to expand its dairy business by entering the north-eastern markets and strengthening its footprint in West Bengal.
Plans are also afoot to diversify its product basket by having value-added offerings like curd and yoghurt.
According to Mayank Jalan, Chairman and Managing Director, Keventer Agro, the company is in ‘active talks’ with multiple people in Guwahati for establishing its presence in Assam.
“North East is going to be a special focus for us. We are currently studying the opportunities there,” he told BusinessLine.
“This apart, we have a huge pipeline of new offering for our consumers,” Jalan added without divulging further details.
Dairy, currently accounts for nearly half of the company’s ₹800-crore turnover. Apart from dairy, food processing —frozen food and beverages — is the other major segment.
The company, which sells its pouch milk and ice cream under the ‘Metro’ brand, operates primarily in the Greater Kolkata region and has a market share of 20-22 per cent and 40 per cent respectively.
The company recently raised ₹170 crore from private equity firm Mandala Capital to fund expansion plans.
“We are in a position to leverage another ₹300 crore and deploy nearly ₹480-500 crore in the next 18 months towards expansion of the dairy business,” he said.
The company currently has one factory at Barasat with a capacity of producing 400,000 litres of liquid milk a day. The aim would be to ramp up production to six-to-seven lakh litres a day over the next two years.
While Bengal will continue to remain at the core of its strategy, Keventer Agro is also exploring possibilities of expansion in Bihar, Jharkhand and Odisha.
As a part of its expansion strategy, the company will look at satellite units (third party manufacturing) and enter into co-packing agreement (for dairy products) with local entrepreneurs. The company has six factories in Tamil Nadu, two in Gujarat and one in Kota running under such co-packing arrangements.
Under co-packing agreements, Keventer will look at entrepreneurs who are willing to invest in setting up a factory. However, the raw materials will be supplied by the company and finished products will be brought back.