The World According to Ritesh Agarwal; Tales of Innovation, Sustainability, and Digital Empowerment

So for me, the belief has been to figure out—“What does a customer in India demand?”—and provide that. My customers tell me that they are looking for a clean and affordable room in a good location. We give them that and that is why they come. And the signage outside the hotel is how you get to the top of the funnel. I am very focussed on conversion and not so much on traffic. Because I believe if you have the best conversion metrics, you can create a virtuous cycle.

Now remember, this is my philosophy and I’ve been challenged a lot on this, including by my chief financial officer, my chief marketing officer, and my chief strategy officer. Everybody challenges me saying, “Ritesh, you’re too obsessed with conversion.” But I believe in it because India is supply-constrained as far as quality options are concerned.

That’s the mindset I have operated with for a long period of time now, for good or for bad. It doesn’t mean we don’t try new top-of-the-funnel things. But so far, our occupancy has done okay for all the new hotels we opened with the repeat customers primarily.

So what is the top-of-the-funnel split right now between the direct customers, the OTAs, and walk-ins?

In India, I think a majority of our business—in the range of 93-94%—would be from non-OTA channels.

For most of our competitors, this number may be dramatically lower because they depend highly on OTAs, specifically and Trivago, to funnel business. Our model works the best for hotel partners as well because they don’t need to give double commission, first to the brand and the second to the online travel agency.

If I were to split that 93% further, the majority of it will be through online channels—the app and browser—so I would say probably 65% or so. You would anticipate around 20% more from corporate/enterprise sales. And then you’d have 6% primarily through walk-ins.

The Postnatal OYO Interview

The Postnatal OYO Interview

Q. If you have such a high percentage of direct customers and an equally high percentage of repeat customers, why is there a perception, at least on social media, of widespread consumer resentment against OYO? A social media search shows a vast number of people complaining the experience was substandard. Similarly OYO’s customer satisfaction scores on OTAs like are often very low. How do you reconcile that?

The headline answer is OYO has served 19 million customers in India, and we have many more app downloads. And these are consumers who we have full details of, some consumers we may or may not have full details of like walk-ins, and so on and so forth.

90% of our revenue comes from repeat and word of mouth. So, there are definitely some customers who are happy about coming back to OYO. At the same time, there are definitely some customers who are unhappy. And if you compare that to any other leading startups in India like Ola or Swiggy, you will get thousands of complaints for each of those brands on social media. That doesn’t mean that a large percent of our customers are unhappy.

Beyond the page New innovations to wow customers and solidify international expansion

On the other hand, we continue to remain sharply focussed on the larger demographic of budget travellers.

The second thing that Ginger did, as did others like IBIS, was what they called “No khaana (food)”—they said breakfast will only be at the lobby. For that, too, you will have to pay more. They also squeezed the size of the room. I felt that both of these practices were customer-unfriendly.

I have tried as much as possible, in the majority of our hotels, to promote our hotel owners to continue sending ghar-ka-type khaana (home-style food) to the room. This is one big reason a lot of our customers choose to stick with us.

How much of your business is from repeat customers?

I think corporate is very critical. Basically, corporate for us is two parts—one is corporate employees who use an app and book with us. The second is corporate employees who use the OYO Wizard programme. OYO in India has partnered over 5,000 corporations, including many small and medium businesses. Pre-Covid, we got 20% of our revenue from this stream, what we call MM or micro-market business.

Regarding our overall national business, 70-75% of our revenue comes from repeat customers. And around 15-17% revenue comes from what we call organic customers. Organic is very simple—people who don’t need advertisements to come stay with us. People will just go to the OYO App, search for a hotel and come; Or if there is a corporate, where there were three employees who used to come and then a fourth employee started coming. So wherever you did not have an incremental expenditure marginal cost to bring the customer.

App Screens & Video Gallery

App Screens & Video Gallery

And this is India only, let me clarify. OYO India would have roughly 90% revenue for which you did not spend marketing dollars. But relatively, Southeast Asia will follow where we see this in the range of 55 to 60%. Our OYO Vacation homes business in Europe will follow, which will be roughly 50%. And then everything else.

Q. Normally, one would think that repeat customers making up the bulk of revenue isn’t necessarily good as that means you’re not bringing in more people into the top of the funnel. How would you reconcile that, especially since your revenues have gone up 4X from 2018 to 2019, but 90% of the same people coming in?

How does that work?

Yeah, I think, first off, the 4X jump is significantly driven by some of the global expansion. But that said, you’re right. A large part of revenue growth is still being driven by the same customers.

I have always believed that in India, if you build a business designed on the back of marketing dollars, it’s very hard to make money because how many marketing channels do you have overall? You have Google, Facebook, and then television. I can’t afford television, and Google and Facebook will squeeze out every dollar I make because there is MakeMyTrip, Expedia, and the big guys who are bidding on those.

The story behind the evolution of a Hero

Our brand promise with OYO was that for roughly Rs 1,500 (US$20) per night, a traveller would get a clean room of a minimum specified size with AC, WiFi, and free breakfast. I believed that such a value proposition would fly off the shelves.

How it all started

How it all started

So I pivoted Oravel to Oravel Inns and offered this service myself. From there, we moved to the OYO avatar and tied up with other hotel partners to offer this standardised, predictable offering countrywide.

Q. That is an interesting back story. While this may well have been a true market gap, what made you believe that this was a value proposition that could be monetised at scale? Even if you could monetise it, how would OYO make money from a room that charges Rs 800 (US$10.5), Rs 1,000 (US$13) or Rs 1,500 per night?

So here’s the thing. I think one of the things that has not been very well understood about our model is the key driver of unit economics. If you speak to folks at Treebo or Fab Hotels, I’m sure you will hear the same things. People think that the average room rent, or ARR in hotel parlance, is the most important metric. It is not.

What is far more important is RevPar or Revenue per available room. For a long time, asset owners operated in a manner where they said that “Because I invested so much capital expenditure, I require Rs 3,000 (US$39.5) or Rs 2,000 (US$26) in the form of earning from this room”. But the occupancy remained very slim.

For instance, if you have a room with Rs 3,000 ARR but a 20% occupancy, your RevPar becomes Rs 600 (US$8). So, the first important criteria for us was to explain that a room of Rs 1000 with 80% occupancy is better than one at Rs 3,000 with just 20% occupancy. If your occupancy is higher, you can easily get 25-30% higher net revenue outcome even if your rates are lower. Very simple principle, right? Anybody who understands any fixed cost business will understand the difference between the price and volume. Our value proposition to the hotel owner was that we will help you get these higher occupancy rates and split the proceeds.

Q. Was OYO the first to offer this type of model? Weren’t entities like Ginger also offering similar services earlier?

Yes, Ginger was there when we launched—they used to offer their rooms at Rs 999, which became a sort of a benchmark for us as well. But they got two things wrong.

One, as soon as they got some demand, they ramped up prices to Rs 2,800 or Rs 2,900 (~US$38). Did they get some short-term RevPar lift? They did. But that dramatically reduced their scale. Because what happened is that they had a certain type of demographic using them but when they increased the price, they became affordable to a much smaller segment of the population —what I call the “credit card customer base”, the 25-30 million Indians who have credit cards.

The problem, as I saw it, was not that there weren’t enough hotels in India. The problem was that for budget travellers, the hotel experience was often broken.


Carsome Online Auction Marketplace to Conquer SEA and Asia Under Wality Group Banner

Last November, Carro teamed up with venture capital firm Insignia Ventures Partners—also an investor in Carro—and gaming hardware firm Razer to apply for a wholesale digital bank licence in Singapore. Having the licence could help beef up Carro’s underwriting capabilities for automotive-related loans.

Tan told The Ken that Carro is also actively looking to apply for digital bank licences beyond Singapore, without naming any specific country.

Dealing with dealers

Dealing with dealers

There is a blue ocean in the used car market waiting for new players like TiinTiin to dive into. According to Monteiro, used car dealers spend 85% to 90% of their time sourcing cars. Working with used car marketplaces offer these dealers unlimited access to inventory minus brokers.

Steven Soon’s car dealership Amcar Motors came across Carsome around when it was founded. “Carsome has an ongoing database for us dealers to access, and we can make up our minds on what cars we want to bid for. So it’s more transparent, because all the prices, car specifications are listed,” says Soon.

The only difference between a small and large dealership is their access to capital. We believe we have both supply and the product to help them forward and double their business. We have built our product to scale and localise to any market we think is suitable. The ambition is Southeast Asia but definitely Indonesia first, since it is 35% of the regional market.


It’s been a particularly tough time for dealers. In Malaysia alone, about 79% of used car dealers surveyed by Carsome saw their income went down while 32% reported zero income.

Although Malaysia is restarting its economy again with Eid around the corner, sales are still slow, notes Soon. The festive season is usually a peak period for automotives sales. But Carsome’s Cheng is not worried.

Based on its platform’s data, Carsome claims it saw about 70% in sales recovery since markets like Malaysia and Thailand started opening up in May.

The startup has also launched a support programme worth up to RM55.5 million (US$12.7 million) to help dealers rebuild their businesses and finances. It offers cash rewards when dealers purchase inventories from Carsome, credit lines to improve cash flow, and advertising support to drive sales.

Meanwhile, Carros’ Tan thinks consumers will still err on the side of caution in the coming months. “I think it will be a W-shape recovery—we will see a momentary spike but it will decline and stabilise before going back up. Primarily due to lack of availability of credit (through financial institutions) and the broader macro outlook,” he says.

C2B2C: a circuitous route

Beyond facilitating used car transactions, financing and insurance are becoming increasingly important verticals for used car marketplaces. With a huge pool of used car transaction data, these marketplaces become the key for banks to tap into for the used car loan segment.

“[The auto-lending scene in Southeast Asia is] huge. Indonesia and Thailand sell about 4 million cars [used and new] annually. Assuming an average order value of just US$10,000, that would be a US$40 billion potential loan market,” says Carro’s Tan.


The Car Sales Finance Combination That Is Proving That It’s The Future

Carro’s founder and CEO Aaron Tan, meanwhile, said China shows that one needs to expect “consumption to be gradual”.

“One of the large Chinese players told me that they are tracking at about 50% of what they were doing last March and expect the end of 2020 to be about 70-80% of last year’s figures. So, we should cash up (count our cash) and try to lower the burn as much as we can,” he said.

Struck by Covid-19
On 24 March, Uxin sold its B2B used car online auction business to its existing investor and Chinese classified platform for US$105 in cash. As of 15 May, Uxin’s market cap stood at US$399.4 million and closed at US$1.45, a far cry from its Nasdaq debut of US$9 per share.

The Chinese market is also home to two veteran used car trading platforms Uxin and Chehaoduo. Founded in 2011, Uxin was the first Chinese used car trading platform to have gone public on Nasdaq in June 2018. It competes directly with SoftBank-backed Chehaoduo’s C2C used car trading platform Guazi, which came into the market around 2014.

Both players, however, have resorted to slash salaries in March in order to tighten budget and cash flow.

According to Jianggan Li, founder and CEO of Momentum Works, compared to the Chinese startups, the Southeast Asian players have got off to a right start by pursuing a C2B or consumer-to-business route.

An Indonesian contender

C2B is probably the best entry point for players to capture market and data without burning too much cash, Momentum Works’ Li says. Most importantly, it helps consumers to solve the problem of cutting out the many middlemen through a transparent process when they sell their used cars.

“The inspection and pricing data collected during the C2B process will be very useful for not only the participants of the trade, but also providers of ancillary services including financing, warranties and insurance,” he told us.

C2B used car trading platforms like Carsome, Carro, and Indonesian BeliMobilGue take a commission from used car dealers for each transaction they process. Customers don’t need to pay a dime to sell.

But the strategies of each of these three companies are vastly different. With the exception of BeliMobilGue that has yet to venture out of its home ground, both Carro and Carsome are present in Singapore, Malaysia, Thailand and Indonesia.

The duo also claim to have been placed well on the profitability meter prior to Covid. “…assuming there is no second wave [of infections], we will be able to continue that momentum and achieve the same as things go back to normalcy,” says Carsome’s Cheng.

BeliMobilGue, meanwhile, sold over 21,000 used cars in 2019—almost half of the 55,000 used cars transacted via Carsome across four markets—as per a report by Singapore-based venture builder and consultancy Momentum Works. Carro declined to share figures.

It is not wrong to say that the Indonesian company is the fastest-growing one in the used car space, and that’s just in one market. But there’s competition in the offing. Enter TiinTiin.

New beginnings

Monteiro stepped down as CEO of BeliMobilGue last July and has also resigned from the startup’s board in mid-March. The startup was a joint venture between Monteiro, Berlin-based used car marketplace builder Frontier Car Group, and Indonesian venture builder Intudo Ventures. Monteiro no longer owns a stake in the business.

Founded by the co-founder and former CEO of BeliMobilGue, Rolf Monteiro, TiinTiin launched in late-2019. He declined to share any performance numbers but said the figures “will be modest compared to any like-minded numbers”.

How Did These Startups Get to where they are Today and How are They Piecing Together the Puzzle of success?

“Ride-hailing, car-pooling and even car-sharing services would eventually make a comeback, but at least in the next six months, people will continue to take a cautionary approach to these services. In the meantime, they will look for personal mobility [in the form of used cars],” says Animesh Kumar, director of automotive consulting at research firm GlobalData.

So, who’s to gain? Used car marketplaces that have enough car-ma points. Like Carsome or MyTukar—Singapore’s Carro is its single largest shareholder—in Malaysia.

“The convenience had me,” recalls Haziq*, who sold his seven-year-old Proton Saga FL in late-2018 through MyTukar.

Having to look around for reliable traditional used car dealers was a hassle. When Haziq finally found one, the dealer cited a lower price for his car, which prompted him to explore alternatives. MyTukar offered to view his car the very next day and provided an instant quote upon viewing.

Haziq got the money for the car sold in 12 days upon accepting it. “They offered a higher selling price so that’s a lasting impression. They also offered me an option of live bidding as an alternative if I’m uncertain about their offer. Overall, I feel like I have more control, with the transparency and quick responses,” says Haziq.

Consumer reviews on Facebook for both Carro and Carsome throw up the same three words: fast, convenient, and easy.

Great odds

Great odds

Both Carro and Carsome started operations five years ago. By 2019, Carsome was transacting more than 40,000 used cars. Carro declined to reveal any performance figures, although it is the best-funded used car platform in Southeast Asia, having raised US$105 million to date.

Carro claims it has achieved group profitability for “many months” up until April, when Singapore launched its partial lockdown. Meanwhile, Carsome claimed it was on track to turn profitable “in a few months prior to Covid-19”.

In addition to used car sales, these startups also have their eyes on the auto-lending sector. Carro estimates that over eight in 10 car buyers will take up a financing offer, which explains why the startup is heavily focusing its business on its financing business Genie Financial Services. It has submitted a bid for a wholesale digital banking licence in Singapore.

The cherry on top here is the sheer scope of the used car market opportunity. According to an estimate by Singapore-based VC consultancy firm Momentum Works, out of the six million used cars sold in 2019 across Southeast Asia, only 2-3% of the transactions took place via used car marketplaces.

In other words, the US$55 billion used car market in the region is an untapped gold mine for these startups.

The China case study

Like many other industries across the world, used car trading platforms in Southeast Asia are keeping a close eye on China’s economy for signs of recovery.

Carsome observed that the dealers in the Chinese used car market embraced live streaming as a way to keep conversations with potential buyers alive—a positive sign of a traditional industry that is turning to digitisation to ensure its survival in a post-Covid era. It’s already happening in Southeast Asia, says Eric Cheng, co-founder and CEO of Carsome, as used car dealers are turning to Facebook Live to interact with consumers.


Having Trust Issues with ZEN? 3 Important Takeaways from ZEN’s Journey for you to Learn from

It’s ZEN Homes—Airbnb-type apartments in residential condominium buildings—that has been severely affected by the pandemic. Boublil said those rooms were ordered to stop operating by either the building managements themselves or local governments in the Philippines. Workers handling housekeeping or the front office have either been reassigned or laid off.

RedDoorz, too, aimed at capturing government demand in Singapore for some of its leased properties, said a former employee. For others, it negotiated the terms. It also took a stab at launching new services as a stopgap, like cloud kitchens in Singapore. Whatever it takes to earn a dime, said the former employee quoted earlier.

In Vietnam, it trialled a SaaS product, similar to ZEN’s, but hotel owners were not willing to commit additional money at this time, the person added. CEO Saberwal said the company has no plans of offering a SaaS product in the future. It would rather stick to its core franchise business. The company did experiment with an affordable, long-stay product in Indonesia to diversify, he said.

Murky future

Murky future

Both ZEN and RedDoorz are confident they have ample cash to survive the crisis. Being in the same business as ZEN, investor Yanolja is committed to back the startup for the long-term, said Boublil. RedDoorz has a runway of more than 15 months. Anything longer than that is unknown territory.

OYO, meanwhile, also has cash reserves. But if any funding needs arise in the future, the company is unlikely to see the same cheque sizes as before, considering SoftBank’s series of troubles, said Satish Meena, a senior analyst at market research firm Forrester Research. After the crisis, Meena thinks OYO will not be in a position to reinvest in all its current markets at the same time. So, exiting some of its Southeast Asian markets is a possibility.

After all, OYO’s expansion to the region was largely viewed as a way to justify its ballooning valuations. “They can’t get that kind of valuation by only being in India because the market is not that big for that kind of valuation,” said Meena. OYO exited Singapore sometime in 2019, according to industry insiders. OYO denied this, but didn’t respond to our request for details on its Singapore operations.

Boublil expects international travel to take time to recover, but domestic travel may start opening up soon as countries lift lockdown measures. Saberwal echoes this view, saying that Southeast Asian markets like the Philippines, Indonesia and Vietnam have always had robust local tourism markets.

It’s still too early to predict what a post-Covid world will be, but what’s certain is that safety will be paramount. “Budget hotels will have to put additional investments in terms of hygiene to ensure customers feel safe,” said Meena. “Who is going to make that investment? Will aggregators still be in the position to invest more in these properties?”

RedDoorz has been working towards getting hotels in its network certified by the governments of Indonesia and Singapore. Property owners will shoulder the costs of the certification, said Saberwal. “We’re not subsidising any cost.”

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A funding round for ZEN from an undisclosed Chinese investor fell through at the last minute in 2018, as per a source with knowledge of events. Deep in financial trouble, ZEN had to downsize its business. It exited several of its eight Southeast Asian markets and executed brutal layoffs

ZEN has since stayed focussed on the Philippines. The company offers guarantees selectively, and most of its properties are fully leased, giving it better control of the margins, said co-founder Boublil. Its SaaS product—alongside a revenue management service—helps hotel owners manage inventory and distribute rooms online without giving up their own brand. As a result, they don’t have to spend on sprucing up their property to join a franchise chain.

Been there, done that

Been there, done that

The SaaS product enjoys a “special distribution” arrangement with online travel agent (OTA), which backs Yanolja, said Boublil. He added that the SaaS business has continued generating revenue during the Covid-19 crisis, but declined to divulge any figures.

But ZUZU offered the SaaS-plus-service model first. The model made sense as people no longer cared about the brand in the mid-to-budget segment thanks to OTAs, which provide crucial information like customer reviews.

Today, ZUZU has more than 2,000 hotels as clients, to which the startup has delivered an average 40% increase in online revenue, claimed co-founder Vikram Malhi. We could not independently verify the claim. ZUZU earns mainly by taking a cut of the revenue, which is why its business has been affected by the crisis. But because it doesn’t need to hire people to manage properties nor spend on minimum guarantees, “we were profitable on a unit basis [before the crisis],” he said.

Unlike ZUZU, ZEN may find it harder to scale its SaaS business because of conflict-of-interest concerns. “If I’m an independent hotel owner, how can I be sure that ZEN is not prioritising its properties over mine?” said an investor who asked to remain anonymous to avoid upsetting any of the players in the space.

Finding ways to cope

It appears that investors were right to worry about whether the OYO model, while scalable, was sustainable.

With revenue on a downhill slide, hotel chains, mainly OYO and RedDoorz, have been compelled to restructure their contracts with franchised hotels. They’ve pulled the plug on guarantees, claiming force majeure. Both have switched those contracts to pure revenue-sharing. “Everything we have implemented has been done as per our contract terms and in full accordance with the hotel partners’ support,” said RedDoorz’s Saberwal.

For wholly-leased properties, companies had to make concessions with hoteliers, getting them to waive rent, agree on a discount or defer payment due dates.

ZEN’s exposure to minimum guarantees was little, claimed Boublil. Landlords of half of its fully leased properties in primary market Philippines, as well as Singapore agreed to negotiated terms. The other half enjoyed high occupancy rates—when borders closed, Singapore had to play host to a large number of its stranded Malaysian workers. In the Philippines, a ban on all public transportation meant accommodation for workers near offices.

Hotel Industry Overview and Open Questions

The problem is simple. The two companies, in competition with each other, have grown too fast—OYO more than RedDoorz—to sustain in the face of crises.

Just months ago, they seemed unstoppable

Just months ago, they seemed unstoppable

The catalyst? OYO. Lounging in Malaysia since 2016, OYO expanded to the rest of the region from 2018, starting with Indonesia. RedDoorz wasn’t going to sit quietly. It raised a US$45 million Series B round in 2018, although it was only announced the following year, according to a former employee. A Series C round worth US$70 million followed in 2019.

This as revenue from online hotel bookings in Southeast Asia was expected to jump from US$13.6 billion per year in 2019 to US$38 billion by 2025, according to a report by Google, Singapore sovereign fund Temasek, and management consultancy Bain & Company.

RedDoorz and OYO would one-up each other’s minimum guarantee offers to poach hotel partners. The frenetic pace was exemplified in Thailand, where RedDoorz set up an office in late 2019 only to close it down when the pandemic started to unfold.

The company was also said to be burdened by runaway expenses. “Corporate credit cards were doled out generously. Expense approvals came left and right,” the former employee said.

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Forget the math, what’s important was to close deals, ex-employees of both companies said. “We were extremely growth-driven,” said a former OYO employee in the Philippines. “The marching order was to get as many hotel rooms as possible. We did whatever it took to achieve that.”

The minimum guarantee that RedDoorz gave out was not backed by data or science, but “by stupidity”, pointed out the former employee cited above. The minimum guarantee was often more than 100% of a hotel’s monthly revenue, the person added.

RedDoorz’s Saberwal, however, said his company has been selective with its minimum guarantee model. “We have further reduced this programme in 2019 with profitability becoming the larger priority for us.”

But Saberwal also said that there’s a time for growth and a time for profitability. “Not even for a second do we regret being in growth mode. We were in a situation where if we would not have grown, we would not have been the number one player, simply because OYO was coming down with how many billions of dollars of funding. The money we raised was meant to be spent,” he told us.

The smaller players like ZEN and ZUZU, meanwhile, have played it safe. Although in ZEN’s case, it appears not to have been out of choice. Founded in 2015, the startup also prioritised regional growth metrics over scaling sustainably in its initial years. It had the backing of German investor Rocket Internet.

However, it had to scale back after a supposed near-collapse in early 2018 because of lack of funding. It was saved by a US$15 million strategic investment from Yanolja later that year.

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It all boils down to how rapidly the chains expanded. Following its India playbook, OYO grew at breakneck speed. Soon, RedDoorz, too, found itself growing at all costs to counter OYO’s aggression, with its sight set on an initial public offering, said former employees.

In contrast, ZEN, which had its share of stumbles back in 2018, has since grown more conservatively. Backed by South Korean motel unicorn Yanolja, it has kept its headcount lean and also diversified its revenue streams. The company’s war chest is one of the smallest among Southeast Asia’s hotel chains.

Total disclosed funding to date

US$2.4 billion; of which US$200 million was for Southeast Asia
US$134 million
US$23 million
ZUZU, which challenges the concept of franchising, is an outlier. The startup is present across six Southeast Asian markets, but has kept its workforce small and raised just about US$7 million to date. Unlike the hotel chains, the company does not deal with brand upkeep and guarantees. It solely offers independent hotels SaaS products and services to manage and grow their bookings—something ZEN also does. While its revenue has plummeted, ZUZU’s lean cost structure has shielded it from massive layoffs.

It’s uncertain when the menacing clouds hanging over the tourism industry will clear, but the players think they have ample cash to survive.

Though some may exit markets in the region. For good.

Hire fast, fire faster

Hire fast, fire faster

RedDoorz and OYO’s problems didn’t start with Covid-19. Last year, after the WeWork debacle, RedDoorz introduced “performance-based” job cuts, affecting 10% of its workforce, according to a former employee.

OYO began a series of cuts by January 2020—first in India, and then markets like China and the United States. Little has been reported about what’s been happening to its Southeast Asia operations. We learnt, after conversations with former employees, that about 200 people in Indonesia and dozens in the Philippines were dismissed.

The sacking spree escalated once the pandemic struck. Many employees are outraged with the way it was executed. “They sent an email to those that were let go informing them of the decision and that was it,” said one furloughed OYO employee. “Those who were given salary deductions were not even consulted.”

Another OYO employee feels their furlough was as good as being laid off. “How do I support my family during that period?” OYO said the 90-day furlough period was based on its initial assessment, adding that it is “constantly evaluating the situation”.

In Vietnam, RedDoorz managers allegedly read out names and asked them to go to a different room. “They were let go on the spot,” said a former employee. In the Philippines, the layoffs were done over Zoom calls.

RedDoorz co-founder and CEO Amit Saberwal said the company had to implement “a number of hard but necessary measures to safeguard its business in light of Covid-19”. He added that RedDoorz rolled out the measures in phases:

Three different waves

Wave 1 (before 15 March):
Cutting marketing and travel expenses, senior management pay cuts between 15%-35%, hiring freeze, forfeiting variable pay, delay in appraisals
Wave 2 (after 15 March):
Work from home and social distancing initiatives, reduced working hours, temporary furlough leaves, laying off less than 10% of total workforce
Wave 3 (1 May):
Salary cuts across the board based on tiers of seniority, starting with 15% reduction