Companies

OYO’s WeddingZ business thrives in a marriage of convenience

Varun Aggarwal Mumbai | Updated on February 05, 2020 Published on February 04, 2020

Even amid lay-offs and restructuring at the parent firm, the start-up grows, helped by OYO’s network

Hotel chain OYO Rooms has been in the eye of the storm in the past few months, but that hasn’t deterred its wedding planning business from scaling rapidly in India.

WeddingZ.in, a start-up acquired by OYO in August 2018, has grown 14-fold in the past 1.5 years despite OYO’s company-wide restructuring efforts.

“In the last 18 months, we have moved from two cities to 40 cities, from managing 200 venues then to 1,200 now. In terms of revenues, we have experienced a 14x growth since then; while in terms of number of employees, we have grown 10x,” said Sandeep Lodha, CEO, WeddingZ.in at OYO.

The growth at WeddingZ comes at a time when OYO is looking at a group-level job cut that is estimated to relieve some 2,000 employees from their jobs, along with shutting operations in 200 cities.

According to Lodha, the restructuring process within the parent group did have some impact on WeddingZ’sgrowth plans. But despite that, the subsidiary is looking to add hundreds of jobs and several new cities over the next year.

‘Minimal impact’

“Every business within OYO has gone through restructuring, including WeddingZ,” Lodha said. “The impact, however, has been minimal for us. We are still on track for growth. In the coming year, we are expecting 3-4x growth; we are going into 20 more cities and expanding our supply by a factor of 3x.”

What’s changed, however, is the focus on profitability. The employee growth rate has also slowed down. While Lodha had indicated that the company will have 3,000 employees by the end of 2019, it still stands at around 2,100.

“When we select a city, we now ensure that it becomes profitable within six months, and venues become profitable in three months. We are enforcing this strongly now.” The efforts, he said, are bearing fruit, with about 80 per cent of the venues already profitable. The company has already exited several cities where the business was not profitable and venues hadn’t performed.

The growth of the business is, however, largely driven by the parent group.

“What has triggered this growth is that now we have a good supply from OYO-run hotels. Most of these hotels have a banquet hall that helps us scale our portfolio. Moreover, OYO has a large corporate sales team with 1,000-plus members — that has helped us get corporate sales demand, which was not there before the acquisition,” Lodha said. WeddingZ has also tapered its plans to expand its sales stores expansion. Until last month, it had plans to expand from the current two cities to 15 cities.

Published on February 04, 2020
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