Machete 17 Tail ender Edition: The PC’s Mightiest Spec-Work Horse of Them All

With the pandemic forcing countries into lockdowns, streaming apps—live or not, where streamers eat, dance, play games, joke around and even dive into politics—got popular. The impact was felt across various players:

M17 claims its monthly revenue has tripled now, during Covid, since December last year.
M17 rival Bigo LIVE, owned by Chinese live-streaming giant YY, saw its revenue jump 17% in Q1 versus the same quarter last year.
In the short video category, TikTok just had its best quarter yet. The company owned by China’s ByteDance has had the highest number of downloads for any app in a quarter, with its revenue more than doubling year-on-year, reports mobile insight firm Sensor Tower.
But M17 was not going to take any chances. To streamline its business further, it sold its Singapore-based dating business Paktor—the other half of the merger that formed M17. It also closed down the Southeast Asia operations of its live social commerce service HandsUP. Both happened earlier this year.

M17 seems to have renewed its IPO focus. Trimmed and doing better than ever, it’s now playing safe in case of a Covid-induced downturn. But it can afford that now for not having played too safe with Japan once.

Japan and Taiwan lead the show

Japan and Taiwan lead the show

If it wasn’t for Japan, “M17 wouldn’t have survived,” said a former employee requesting anonymity for fear of retribution. Japan accounts for two-thirds of the company’s revenue today. But back in 2018, it was just 19%.

Frost & Sullivan had predicted Japan would overtake Taiwan in terms of market opportunity by 2020. M17 took a chance to get a leg in.

You see, live streaming was never the problem for M17. If anything, it’s proven successful for the likes of YY and Momo in China. M17 needed to scale to turn a profit in Developed Asia. Other issues included stagnating user growth in Taiwan, and the fact that nearly half of its revenue came from its 500 biggest spending users—called ‘whales’.

The answer was Japan

CFO Shang-Hsiu Koo told The Ken that M17’s now profitable in Japan, where 20 million of its registered users are from. “There’s scale, so as a percentage of revenue, our sales and marketing expenses are much lower,” he said.


But investors weren’t keen on Japan in 2018, Koo revealed. It was initially a lossmaker. “Our mistake was that we tried to list in Q2 of 2018, rather than waiting to see the results of our marketing performance,” said Koo, noting that M17 started to overtake its rivals in Japan by the next quarter.

“There’s definitely a sense of we want to get to this milestone and let’s just get there even if the book isn’t perfect and the valuation is not what we want.”


M17 investor Joseph Huang, partner at Infinity Ventures, told The Ken that Japan has seen lower average revenue per user than Taiwan, but offers a “broader” base that’s not “as skewed towards whales.” The Ken could not independently verify the claim.

The Future of Healthcare in Malaysia

“Unless security systems are designed to record access, the curious, entrepreneurial or venal can enter databases without leaving evidence of having done so,” it explains.

Special efforts

Special efforts

Previously known as Telemedicine Development Group, DHM was formed in 2017 to further digital health initiatives in Malaysia. It is co-chaired by the director-general of the Health ministry and chairman of Malaysian Communications and Multimedia Commission (MCMC).

Meanwhile, Faizi Rosli, the director of ethics and legal division under Malaysian Medical Council (MMC)—which governs all registered medical practitioners in the country—emphasises that the use of technology shouldn’t alter the ethical and professional requirements in the provision of care.

In a recently held webinar by Digital Health Malaysia (DHM)—a non-profit special interest group formed by policymakers, doctors and telemedicine companies—Faizi spoke about how crucial it is for doctors who provide virtual consultations to inform patients of the limitations of the service.

“Records must be reproducible for the sake of referral and patients’ consent must be obtained to record their details. That said, MMC is not giving permission to virtual consultations, we are giving guidance and reference to doctors that practice it in order to maintain standard of care,” he said.

In an email reply to us, the MoH said the report by Alpha Catalyst for a regulatory framework will most likely be finalised by early December.

“We will pursue further the option for the regulatory framework including a sandbox if required based on the findings and recommendations in the report. Usually used for new emerging technologies/innovations, [it] may not be useful for telemedicine,” says Fazilah Shaik Allaudin, senior director of the ministry’s medical development division.

Neighbouring example

In April 2018, Singapore launched its first regulatory sandbox — Licensing Experimentation and Adaptation Programme (LEAP) for the telemedicine industry, enabling development in the space with close monitoring of all aspects of safety, including clinical processes, medication delivery and data protection, while co-creating the appropriate regulations.

What should be regulated in the telemedicine space? Well, everything.

“It’s not just doctors’ practice or medical practitioners. It’s also data management, user privacy etc. Telemedicine is an industry, and everything that goes into it has to be regulated,” says Choy.

New wings

While it may take months before the regulatory framework is finalised, DoctorOnCall is not resting on its laurels.

Riding on the winds of change, the startup is on a fundraising trail to boost its operations. Virumandi declined to share further details but said there’s been “a huge traction from some top investors in Malaysia and Southeast Asia”.

Things were definitely not the same when DoctorOnCall first started in 2016. The founding team, says Virumandi, hasn’t taken a salary in the last four years. Investors were not convinced of the potential of the telemedicine industry, especially with the impending regulations rigmarole.

“A lot of them were short-sighted in not understanding the same regulatory barriers and the high barriers of entry ( Porter’s Five Forces) into the business. It’s like a castle with a very deep moat, and there’s a lot of gold in it. They didn’t think we could penetrate that,” says Virumandi.

Far-Reaching Effects of Integrating Telemedicine Technology in Healthcare Practition: Best Practices and Benefits

“Employing your own doctors means you can assess the doctors’ performance and improve on it,” he says, adding that it’s a worthy investment as compared to using the same amount of capital for brand-building.

Carved by Covid

Virumandi is right in noting people’s usual scepticism. But while there’s usually resistance to all things new, the pandemic has fast-tracked digital transformations. The healthcare industry is no different.

Doc2U’s Choy notes that the awareness and adoption rates have increased significantly post-Covid. “Most telemedicine players in Singapore and Malaysia would see their adoption rate increase between 30% and 70%,” he adds.

Doctors’ initial concern with telemedicine is “does it work?”, shares Seenivasagam.

“How do you diagnose without physical interaction? The best thing to do when you’re unable to conclude a diagnosis, you can always refer the patient to a nearest clinic or hospital. The whole idea of telemedicine is early detection and management,” she says.

Uberising healthcare

Uberising healthcare

DoctorOnCall claims doctors are able to earn between RM3,000 (US$690) and RM4,000 (US$920) of additional income on a monthly basis. Doctors are able to pocket 60-80% of the RM20 (US$4.6) fee for each consultation.

Covid-19 has proven the efficacy of telemedicine, she adds, as patients across Malaysia are able to reach out to MoH’s family medicine specialists to help address any uncertainties they have about the pandemic.

In the last few months, DoctorOnCall has extended its services to include offline services such as appointment bookings with medical specialists. It has also partnered with Covid-19 testing service providers where individuals are able to book testing services on DoctorOnCall.

Virumandi declined to provide the split of the company’s business—between business-to-business-to-consumer (B2B2C) and business-to-consumer (B2C)—for competitive reasons. However, he claims that DoctorOnCall is working with over 10 insurers and over four third-party administrators and hundreds of companies to provide virtual healthcare services and medical prescriptions to patients.

Meanwhile, Doc2Us serves mainly—80%—the business-to-business (B2B) sector while the rest is retail consumers.

As the telemedicine players carve out their niches within the business, the problem of the lack of regulation comes knocking.

Doc2Us’ Choy sees the merit in a regulatory framework, noting that current players in the Malaysian telemedicine industry are already generating revenue from their consumer base. Hopefully, he says, there would be gazetted laws in the next few years.

Unregulated is unsafe

The government, of course, has accelerated its efforts towards regulation.
If telemed is left unregulated, it might lead to commercialisation and compromise in the duty of care, says Dr N Ganabaskaran, president of the Malaysian Medical Association (MMA) that represents medical practitioners in the country, adding that more engagement will be needed among stakeholders to address these concerns.

Electronic transmission of data increases the opportunity for unauthorised interception of personal information, thus increasing the risk of privacy infringements. This is supported by Telemedicine: A Guide to Assessing Telecommunications for Health Care, a book published by US non-government organisation Institute of Medicine—now known as National Academy of Medicine.

How Dr David Brown saved my life. A Personal Account of Malay People’s Experience With Doctor On Call

Thanks to the tie-ups between the government and DoctorOnCall, Sashini Seenivasagam, a GP who joined the startup’s platform in May 2019, claims she has been able to reach out to 20-30% more patients from the rural states of Malaysia, who would otherwise find it challenging to consult a doctor without travelling hours into the city in search of government clinics.

Beyond accessibility in terms of geography, the platform is also making medicines more economically accessible. With the prescriptions patients get via DoctorOnCall, they can purchase and have their medicine delivered at 30% to 70% less than they would pay should they visit a private hospital or clinic.

“We have scale, so we could negotiate with pharmacies and get such cost savings that we could then pass down to consumers. Because of this, insurers are happy to work with us because they can pare down the healthcare cost [of their clients],” says Virumandi.

Getting insured

Getting insured

Less than 40% of Malaysians own a life insurance—a significant untapped potential for the insurance industry. Telemedicine platforms might be the boost that insurers need to penetrate the life insurance sector in Malaysia.
Local insurer Zurich Malaysia says health protection is an area that has plenty of room to grow in the country as many Malaysians are still underinsured.

Its collaboration with DoctorOnCall was a recognition of a digital shift within the insurance space. The insurer, however, said it is unable to provide an estimate of customers that will potentially benefit from the tie-up.

“As industries shift digitally, especially in light of the Covid-19 pandemic, we have seen an added emphasis on convenience. This digital shift is accelerated with remote working and staying indoors becoming part of the new lifestyle,” says Stephen Clark, country head of Zurich Malaysia.

The Essential Guide to DoctorOnCall’s Unique Growth Mix Strategy

From telemedicine and wearables to the larger 5G-enabled health support at hospitals, telehealth plays an important role in enabling flexibility for people to choose suitable actions that contribute to their health and wellbeing, says Clark. Although, it will not be replacing the entire spectrum of care so the brick-and-mortar healthcare set-up is here to stay, he adds.

According to Virumandi, DoctorOnCall complements the life insurance businesses of various insurers, citing its with Zurich Malaysia as an example.

“We package it in a way that consumers get tele-health consultations and medication delivery for free. In other words, they don’t need to wait for some serious condition to befall them to make use of their insurance plan—this changes the mindset of ‘why should I get an insurance plan?’” he says.

But of course, it is also a very lucrative revenue stream for telemedicine startups, notes Manasije Mishra, managing director of Indian telemedicine startup DocOnline.

Telemedicine startups could charge insurers an annual subscription fee or charge per virtual consultation. Either way, such tie-ups with insurers provide a substantial cash flow for startups.

What sets telemedicine startups apart is the clinical quality, a factor which Mishra believes will also be a main draw for insurers. Many in the industry are simply an aggregating platform for doctors to utilise their free time to consult, but that doesn’t guarantee a quality clinical experience for patients.

In-depth Overview of Doctor On Clear & What it Offers its Customers

All in all, it paints quite the rosy picture, with one significant thorn. Telemedicine in Malaysia is unregulated thus far. The Telemedicine Act 1997 neither spells out the procedure for a local medical practitioner to practice telemedicine nor has it been clearly enforced.

Though MoH has been working with Singapore and Malaysia-based digital innovation consultancy Alpha Catalyst since March to establish a regulatory framework for private online healthcare services in Malaysia, the startups are all up and running.

Investors are warming up

Investors are warming up

In Singapore, telemedicine startup Doctor Anywhere has raised US$27 million in March to pursue regional expansion to Malaysia and the Philippines.

Unlike Singapore which has launched a regulatory sandbox for telemedicine startups to operate in, it’s a tad late for Malaysian telemed players well past their pilot days.

“Telemedicine startups like ourselves are all self-regulating—this excludes doctors’ practice because that’s regulated by the Malaysian Medical Council,” notes Raymond Choy, co-founder and CEO of Malaysian telemedicine startup Doc2Us.

Telemedicine players in Malaysia are currently being guided by an advisory released by the Malaysian Medical Council. But healthcare professionals have questions.

Doctors that were approached to join DoctorOnCall’s platform had concerns about its legitimacy, data security, privacy, and others, shares Virumandi. But between an unregulated medium that’s government-sanctioned and can help with quick intervention and poor public health, surely, urgency takes precedence during a pandemic?

Filling healthcare holes

Government healthcare facilities in Malaysia are notorious for their long waiting hours. Elective surgeries could take up to months, especially those in urban areas.

In the last few months, DoctorOnCall claims to have broadened the funnel by helping over 5 million Malaysians navigate the pandemic better. On the platform, patients can request for an online doctor’s consultation and obtain drug prescriptions or hospital referrals.

Imagine if these 5 million Malaysians all went to the government clinics? It’d be chaos.

Covid-19 in Malaysia as of 1 June, 2020
Besides, there’s also an absence of a centralised system to integrate patients’ health records—a problem Virumandi notes. Formerly a senior manager at Deloitte Consulting, Virumandi ventured into the healthcare space through the acquisition of Nexus Group of Clinics in Malaysia.

Hospital chains in Malaysia usually expand their businesses through acquisitions, observes Virumandi. But when that happens, patients’ records are not integrated into a single, common system, resulting in records being transferred manually—an inefficient way to deal with information.

Which is why beyond phone and video calls with doctors, the startup has also built a clinical management solution around its virtual consultation service, where doctors are able to take notes, issue prescription references and even medical certificates.

“So you get a very similar in-clinical experience as opposed to just talking about your illness over a call without a clear output. Doctors are still the gatekeepers — only with doctors’ diagnosis and prescription do we then allow medication to be delivered within the same day or next,” explains Virumandi.

Another key challenge is low healthcare accessibility for patients living in rural areas.

The Offensive Provided by a Vertical Integration Strategy Means Opportunity for Markets, Innovation – But is it Greatly Affecting Market Prices?

According to the current Amazon executive quoted earlier, the company would need to invest considerably to bring the scale of manufacturing in India up to speed. After seeing a slowdown over the last two months, the executive doesn’t think that Amazon has the appetite for this at the moment.

Improving manufacturing in India would require both the carrot and the stick, Bhardwaj said. “The government may provide some incentives when they buy from micro, small, and medium enterprises (MSMEs). The stick is increasing import duties. Like the auto policy, if you want to invest in India, then there needs to be localisation.”

The Make-in-India conundrum

But even if Amazon wanted to shift to manufacturing in India, there are significant hurdles in its path. While a large number of products can be made in India, the issue for local businesses is that they can’t produce at the scale Amazon requires. So, instead of one company producing a million pieces, this is spread out over a hundred small companies, said Anil Bhardwaj, secretary general of FISME. The solution, he added, is to develop models of aggregation that can scale.

That, unfortunately, is easier said than done. In 2018, Amazon signed a partnership agreement with FISME to onboard local businesses and help them upgrade their technology and capacity building. The company later pulled out of the agreement. “We are still in discussions. They still need to do business in India, so do we,” Bhardwaj said.

The issue with manufacturing en-masse in India is three-fold, the former and current Amazon executives said. For starters, there is a lack of technical know-how, something China has built over years. An Apple cable comes with a certificate of authenticity from China and this is true for consumer electronics across the board in India. For instance, silicon microchips—integral components in tablets, phones and laptops—are manufactured predominantly in China.

Manufacturing in India is also scattered, unlike in China, where there is consolidated procurement that happens from 2-3 provinces. Take the city of Guangzhou, for instance. It plays host to the annual Canton Fair, which Amazon uses to source ‘home and kitchen’ products, said the former executive. After electronics, ‘home and kitchen’ is Amazon’s largest category.

Stepping on the Accelerator

Amazon’s saving grace may prove to be its Global Accelerator programme. When Amazon launched the programme in 2018, it reached out to 50-60 small and medium enterprises (SMEs), offering them marketing and data insights to help drive sales.

The Indian government has already wielded the stick. In February, it doubled the customs duty on 111 items to 20%. This will hurt Amazon significantly, with toasters, water heaters, fans, and air purifiers all affected by the hike. When private label imports resume from China, Amazon will have to decide whether to pass this hike on to customers or take a hit on margins to remain competitive on price. The cost will likely be built into the pricing, and Amazon will incentivise customers during sale periods, Forrester’s Meena said.

How Amazon’s Call to Quality + India Fit Into the US Based Vertical Integration Playbook

Importing from China gives the company a price advantage and large capacity, which is not easy to replicate in India, an Amazon executive said, declining to be named as they aren’t authorised to speak with the media. Sellers and the former executive quoted earlier agree unequivocally. China is a wholesale market, with cheap labour, better quality products, and, most importantly, the scale and capacity to handle large volumes.

Its Chinese reliance, though, is no longer an option. The global supply chain disruptions due to Covid-19, coupled with recent hikes in import tariffs on several items, have made that clear. According to a deck sent to sellers, which The Ken has seen, Amazon is looking to broaden its supplier base, at least when it comes to PPEs. It has asked brands under its Global Accelerator programme to start making PPE equipment locally. A new chapter in Amazon’s private label playbook, perhaps?

Chinese comforts

Chinese comforts

Despite the turmoil over the last few months, China remains a key part of Amazon’s global private label strategy. Its international brands like AmazonBasics—which sells everything from office supplies to electronics in India—are controlled by the company’s Seattle headquarters. This means that product specifications for the brand are uniform, allowing the company to source in bulk at a scale unimaginable to most businesses. China is possibly the only country that can handle orders of this magnitude. As of publishing, Amazon did not respond to detailed questions sent by The Ken.

As a result, its private label products in consumer electronics—which largely fall under AmazonBasics—are almost 100% dependent on China, said both the current and former Amazon executives. Consumer electronics, incidentally, happens to be the top category for e-commerce firms in India.

“At a product level, Amazon gets products 70-75% cheaper from China. After landed costs like insurance, warehousing, and transportation, the products are still 30-35% cheaper”


Even outside AmazonBasics, certain categories are inextricably reliant on China. Like high-selling, high-margin categories such as fashion watches and eyewear, for example, according to a former contract manufacturer for Amazon. In these categories, the margins can jump by over 5.5X thanks to procurement from China, he added.

While these categories are unlikely to see significant changes in sourcing, Amazon has more sourcing flexibility with its India-specific private labels like Solimo. Many Solimo products are distinctly Indian, like vessels to cook rotis, for example. These are usually outsourced to Indian manufacturers. However, even if the end product is finished in India, several sellers procure the raw materials from China, said the private label seller quoted earlier.

The dependence of Amazon and Flipkart on China has been a sore point for small traders in India. In January, the Federation of Indian Micro and Small & Medium Enterprises (FISME) claimed that e-commerce giants import almost 80% of the goods sold on their platforms. This, however, may soon change. The PPE Amazon wants its brands to make, for example, will be sourced indigenously. The private label supplier says he is turning to a local manufacturer because travelling to China to check the quality of the material is simply not possible at the moment.


How Shopbacks Supports Varied Market Sectors & Social Ventures

In Australia, for example, ShopBack says it overtook its closest rival, Cashrewards, within 18 months of its April 2018 launch. Unlike ShopBack, Cashrewards did not have a mobile app at the time, despite claiming to have 365,000 users and annual revenue over AU$12 million (US$7.84 million).

The situation was tougher in tech-savvy Taiwan, which was ShopBack’s first expansion market beyond Southeast Asia in 2016. There, it opted for a local approach. It first joined the AppWorks accelerator programme in July, and then launched a local service later that year.

Regional resilience

Regional resilience

ShopBack’s regional presence has given it positives in countering the impact of the pandemic. Taiwan, where ShopBack claims to have 2 million registered users, has weathered the pandemic and seen e-commerce rise. ShopBack lost fewer deals in Taiwan during the pandemic compared to other markets, according to a list of providers on its website.

South Korea, another high-spending e-commerce destination that’s reopening after a lockdown, is next on the launch list. Weeks after its Temasek funding announcement, ShopBack acquired Ebates Korea to enter the country.

The undisclosed deal, which Chan said had been agreed in the fourth quarter of 2019, is symbolic for ShopBack. Ebates is the north star for any cashback business. Rakuten acquired it for a cool US$1 billion in 2014. Now known as Rakuten Rewards, it claims its 12 million members have earned over US$1 billion in cashback. It also claims to be profitable.

Rakuten Rewards, headquartered in the United States, may be king in North America and Rakuten’s home base Japan, but Korea was an anomaly as its only overseas market. Ebates has been there since 2013, but Chan said the handover happened because ShopBack is better placed to manage it as an Asia Pacific-based company. The deal also appears to deepen ShopBack’s relationship with its board member and CEO of Rakuten Rewards, Amit Patel.

ShopBack’s presence in nine countries gives it relevance to partners that want to strike regional deals, but it isn’t about to go full throttle. “We won’t enter new markets until we are number one in our newest market,” said Chan.

Transitioning Ebates Korea and a recent Vietnam launch are the immediate focus, but Chan did not rule out future opportunities when the time is right. Evidence suggests the approach has worked well so far.

Hey big spender

E-commerce spending in Taiwan reached $2.7 billion in the first quarter of 2020 despite the Covid-19 outbreak, according to government data. That’s significant given Taiwan has a population of less than 25 million people. E-commerce across Southeast Asia’s six main markets was $9.5 billion per quarter in 2019.

“Many companies enter Taiwan and try to localise, but ShopBack’s most important lesson was to send [co-founder] Joel [Leong],” AppWorks partner Jessica Liu told us.

Leong spent more than a year living in the country for the launch. He personally struck early deals with e-commerce companies and banking partners, and made key senior hires to imprint the company culture, Liu added.

Shopbacks Guarantee Policy and How it Compares with Other Companies

A Singapore-based VC who passed on an early investment in ShopBack said that its unit economics, while solid, didn’t seem like the foundations for a mega company that could yield big returns. ShopBack could be profitable, but the VC doubted its potential to be a truly huge player.

One of ShopBack’s key growth engines to prove such naysayers wrong is currently on ice. ShopBack Go, its offline rewards programme, is grounded in Singapore—the only market where it is available. Singapore’s national circuit breaker to combat Covid-19 has limited business opening hours and restricted public movement.

A pandemic may be a good time for deals—as businesses chase revenue and consumers get thriftier—but there are immediate challenges. Offers from big names like Grab, Deliveroo, eBay, Marriott and InterContinental Hotels Group have vanished. Deals from others, including Shopee, Lazada, Traveloka and Thai Airways, are limited to select markets.

ShopBack’s recent financing gives it immediate peace of mind over its future, but its cashback empire is reliant on economic bounce-back.

Sales window

ShopBack is a growth-stage startup in every sense. The company claims it reached US$2 billion in GMV in 2019, up from US$700 million the previous year. That’s impressive given market leader Shopee’s US$17.6 billion GMV in 2019.

This year is trickier to track because of Covid-19. “At the end of this quarter we’ll have a better read as every month is very different,” Chan—who is also CEO—said in a recent interview.

Cashback services typically bank 0.5%-10% for each sale they drive, some of which is split with the buyer. Commission varies based on the vertical, with electronics typically low, and fashion among the higher ones. Deals are sourced via platforms like Involve Asia and ACCESSTRADE, which aggregate offers from a long tail of small merchants. But a player of ShopBack’s scale can strike direct deals with e-commerce sites and brands for a higher rate and thus more income.

Cashback as a Tool in E-commerce and Why it Has Become So Popular

“We always kept to positive unit economics; then the only thing you need to contend with is scale,” said Chan, adding that most of ShopBack’s deals are direct with brands or marketplaces. “We had two or three markets close to break-even on all costs in early 2020.”

Financial filings show that ShopBack has burnt significant capital. It banked US$28.6 million in revenue from March 2018 to March 2019, according to VentureCap Insights. That was double the previous year but it came at a cost: losses grew to US$47.5 million from US$10.9 million. In a way, Covid-19 couldn’t have come at a worse time.

But ShopBack’s affiliate marketing model—which typically receives less investment than click-based advertising models from Google and Facebook—is a reason for optimism.

Travel revenue has disappeared, but other areas have stepped up, particularly e-commerce marketplaces. Brands that were reliant on brick-and-mortar retail are now seeking new ways to reach consumers. In the US, for example, Pepsi, Heinz and Nestle are among F&B giants that have launched their own websites to sell directly to consumers.


Just Thinking About It Makes Me Vomit

And this is something that we believe we will see in most markets across the world, that the economy hotels will be the first one to come out, partly because of the young people who will have a higher need and will be less risk-averse comparatively.

But coming back to cost, we hope we can help our partners in four important areas. This is what we call the OYO partner survival programme.

What’s Behind the Curve?

What's Behind the Curve

The first one is helping our partners negotiate their leases in a more fair manner. Because if you have negotiated your leases at a RevPar of 900, when the new RevPar is going to be 700 or 600, you will not make money. But it’s also unfair to expect your owner to give you a new lease and not expect a recovery in the future. So we are helping our partners come up with a lease programme. It is a fixed-plus-variable programme, where you say “RevPar is going to drop, so give me a base amount”. But as the RevPar increases, OYO will directly give transparent visibility to the owner and the lease will keep increasing.

The second, reducing operating expenses, like I mentioned. Third is ensuring that we bring sanitisation and trust to the underlying hotel owner. And the fourth is enabling debts or loans by the MSME (Micro, Small, and Medium Enterprises) programme of the government or by means of NBFC partners that we may have, to be able to let them scale their business themselves.

NBFC partners

Q. And what about OYO itself? What are your plans for the next 12 months? What are the top three things that you’re doing to make sure that you survive or thrive in this pandemic and after?

Last year, 2019, we saw significant growth. We served a lot more customers and partners; we brought in a lot of employees than we ever did in the history of our company—many multiples right?

But that said, this gives us an opportunity to really get back and get deeper to say: How do we make sure every customer who comes to OYO gets a great experience? How do we make sure we build deeper bridges with a partner?

And third is with our employees. This is the time to really have deep engagement with our employees and build the culture and the values of our company that we stand for, which is very hard to be able to share with three or four times the number of people in six months. But now gives us an opportunity to over invest and spend the time to do that.

Of course, we are also making sure that we are prudent about all controllable costs, including capex, marketing, any significant additional expenditures that we may have. The most unfortunate thing… is right after a restructuring in January, having to unfortunately follow through with some furloughs at this point of time. That has been the toughest thing at this point of time. But again, I think that was something that needed to be done to ensure that we get through the crisis and come out stronger.