In order to stimulate loyalty among its partners, hotel room aggregator OYO Rooms has set up an online marketplace OYO Bazar, a one-stop shop for hotels to obtain daily essentials required to run their business.
“As the market matures, hotel partners will look for more support from a single partner they work with. The intent is not to become an e-commerce company but to become a preferred supplier for our partners,” said Ritesh Agarwal, chief executive of OYO Rooms.
The OYO Bazar wishes to utilize bulk sourcing capabilities and bargaining power to provide inventory to hotels at approximately 25% cheaper prices than market rates while generating 25% margins for itself. So far, about 10 vendors have signed MOU's with OYO Bazar for providing hotel supplies in a certain price range, maintain quality standards and deliver products to hotels on time.
With a margin ranging between approximately 20% per hotel partner, OYO Rooms has a network of more than 5,500 hotel partners. “Our margins are healthy enough to hit profitability but to continue to grow and maintain our partnerships with hotels, we need to expand our services,” said Agarwal.
OYO Bazar, launched in March with 180 stock keeping units in three product categories – linen, maintenance services and LED lights , was initially piloted in Delhi and Gurgaon. Expansion plans aim at 500 Units in the next two months, adding products such as cleaning supplies, crockery, bathroom wares and room and kitchen appliances.