Oyo segregating its hotel business to 3 major verticals

… to buy back shares from the early investors such as Sequoia Capital and Lightspeed Venture Partners to grip on to his company’s ownership.
Oyo Hotel, logo

KVN Rohit/IBTimes India

Oyo is segregating its hotel business to three major verticals focusing on India, international and technology and brand licensing. The Indian hospitality company is trying to attract investors for each business vertical by simplifying the operations.

The segregation will allow the company to have a sharper outlook with specific job resolutions in their verticals and workspace. It will further improve the company’s competitiveness. The Indian hotel business will get the profit of maintaining its own unique and specific requirements, risks and investor profile; rather than following the international hotel’s growth path.

As per the regulatory filings, there will be a handing and taking over of OYO in India from Oraval Stays, the parent company, to its subsidiary Alcott Town Planners. The subsidiary company will give an advantage of managing the Indian hotel business that has recently stepped into verticals such as co-working and event management. On the other hand, Oraval Stays will be handling the technology business from Singapore. The regulatory filing also states that the shareholders of Oyo will be given equal shares in the company.

Oyo hotel in $300-million expansion in US

Oyo Hotels & Homes CEO Ritesh Agarwal with Hilton Hotels president Chris Nassetta. The Oyo group is adding one hotel per day to its hospitality chain.@riteshagar/twitter

The Indian business vertical has been growing after the appointment of Aditya Ghosh, the former Indigo president, as the CEO. However, the company is not making profits globally; it is piling up losses and heavy investments in China and the US. A regulatory filing stated that about 60 per cent of the fund raised in 2018 went as an investment to expand the business in China.

Oyo has been spreading its wings globally to spread its business. It announced the acquisition of an Amsterdam-based Rental Company named @Leisure Group for an all-cash deal of about $415 million. The company is seeing the involvement of Goldman Sachs’ vice chairman Mark Schwartz as a representative of SoftBank into the company after facing severe losses in China and the US expansions.

At the same time, Ritesh Agarwal, the founder of Oyo Hotels and Home is planning to buy back shares from the early investors such as Sequoia Capital and Lightspeed Venture Partners to grip on to his company’s ownership. The buyback will be helping the 26-year-old founder to have a hold of 30 per cent in the company’s share from a mere 10 per cent. Agarwal has been trying his luck to arrange $2 billion in secured debt from financial institutions and banks in India and other investing countries like Japan and Europe.

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Channel Icon Frank Vitagliano Is New CEO Of Global Technology Distribution Council

… Dell EMC and Juniper Networks, is now chartered with helping the world’s top technology distributors “define” and “promote” technology distribution …

Frank Vitagliano, a 30-year-plus channel veteran and an IT Industry Hall of Fame recipient, has been named CEO of the Global Technology Distribution Council (GTDC).

Vitagliano (pictured right with The Channel Company Chairman Robert Faletra), a passionate advocate for distribution as a channel chief for IBM, Dell EMC and Juniper Networks, is now chartered with helping the world’s top technology distributors “define” and “promote” technology distribution in the cloud services era.

“This gives me the opportunity to work with many of the global distributors, the vendor community that I have known and loved over the years and, of course, to articulate the value of distribution to solution providers from someone who has walked in their shoes,” said Vitagliano, who was most recently CEO of Solution Provider 500 powerhouse Computex Technology Solutions. “I couldn’t be more excited about the distribution opportunity ahead.”

[RELATED: Channel Icon Vitagliano Steps Aside At Computex]

As the CEO of the worldwide industry association that represents distributors selling more than $150 billion in annual technology product and services sales, Vitagliano will be working side by side with the CEOs from the top distributors in the world, including Ingram Micro CEO Alain Monie, Tech Data CEO Rich Hume, Arrow CEO Mike Long, Synnex CEO Dennis Polk and D&H Co-Presidents Dan and Michael Schwab.

Hume, who has known Vitagliano as a friend and colleague for three decades, said Vitagliano’s channel experience and knowledge of the end-to-end “channel ecosystem” makes him the perfect person to lead the GTDC.

“Frank comes to the table with nearly four decades worth of experience not only around distribution but the entire business partner channel ecosystem,” said Hume. “He has connections not only across all of distribution, but down into resellers, solution providers, MSPs and back to the vendors. He has worked in the vendor community and in the channel as a solution provider. He is the complete package. I am personally excited as is all of the distribution community about Frank coming into this role. How often do get an opportunity to find someone with four decades of experience to come into a role like this to set a new agenda as we move forward?”

Hume, who met Vitagliano when they were both working in senior channel jobs 30 years ago at IBM, said the secret to Vitagliano’s success is in no small part due to his authenticity, sincerity and “love” of the channel. “That love of the channel goes beyond almost anyone I know,” said Hume. “Frank has poured his heart and soul into the business partner channel for four decades.”

Hume—who has stepped up the charge at Tech Data to invest heavily into four game-changing markets, including cloud, analytics and the Internet of Things, security and next-generation services, said Vitagliano will play a “critical” role in the “transitioning” of the distribution value proposition moving to “solutions aggregation” in a virtual services world.

“We’re moving from a physical distribution capability to virtual distribution capabilities with cloud marketplaces, etc,” he said. “We are going to see a pretty big shift in terms of content toward these areas relative to what we have historically sold. It is really critical to have someone like Frank to articulate that change. It’s really important that story gets told properly to our vendor and customer community so they can leverage this capability.”

Vitagliano said the role of the GTDC has moved well beyond its early charter of advocating the value of the distribution business model. “The marketplace understands distribution and clearly acknowledges its value in the overall supply chain,” said Vitagliano. “What I am excited about is helping to articulate the value of distribution in the digital transformation/cloud services era with emerging technologies like artificial intelligence, edge computing and big data.”

Vitagliano—one of only a handful of technology executives who have been inducted into the IT Hall of Fame that has honored industry titans like former Apple CEO Steve Jobs and former Microsoft CEO Steve Ballmer—said his 100-day game plan is to “spend a lot of time listening” to distribution technology council members, vendors and partners.

“I am going to spend a lot of time with the key constituents to understand what we need to do to move forward,” he said. “I want to understand what is going on with distributors, vendors and solution providers and what are the types of services we need in the future.”

Vitagliano, who as an IBM channel chief backed a highly charged economic analysis that showed the value of distribution in the midst of the rise of direct market PC era, said he has seen distribution continually prove its mettle even when some in the IT industry were questioning its ability to evolve in a technology market moving at blinding speed.

“Over the years, we have heard numerous times that distribution was going to be disintermediated by PC direct marketers, cloud service providers and even vendor direct programs,” he said. “Through all of that, distribution has continued to grow dramatically and thrive. Now there is no question or debate about the value distribution supplies in the marketplace. But it’s important to make sure people continue to understand that, particularly folks that are new to the industry.”

In fact, Vitagliano said one of the most important roles he sees for the GTDC is continuing to drive the “awareness” of distribution as a driver of new-era IT services and solutions. “I want to make sure we are doing everything possible to articulate the value and ongoing importance of distribution in the IT supply chain moving forward,” he said. “As distribution continues to evolve, it is really important for everybody to be aware of what a difference distribution is making in the digital transformation era. That has to be done in the context of where the market is going, not where it has been. Education, training and support of all the players in the supply chain is critical.”

Vitagliano said he is confident that technology distribution—which emerged at the dawn of the PC era in the early ’80s—will continue to be integral to the delivery of IT solutions and services in the future. “As services and solutions become increasingly complex with IoT, edge, AI, security and big data, more support capabilities will be needed in the supply chain,” he said. “Distribution has the ability to provide that level of support.”

Ultimately, Vitagliano said he sees his role as making sure distribution remains “vital” to vendors, solution providers and even solution provider customers. “What distributors are doing today is as good or better than it has ever been in terms of their capabilities, articulating the value of their capabilities and support. The relationships are outstanding,” he said. “That said, I think we need to continue to evolve and make sure everyone is aware of and knowledgeable about what distribution can provide to the industry.”

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Emerging technologies shaping the future of logistics in India

Today, the transformations that India is going through can be witnessed across all walks of life. Our industries are getting modernized as relevant …

Today, the transformations that India is going through can be witnessed across all walks of life. Our industries are getting modernized as relevant automation and tech-adoptions are increasing their throughput while also improving efficiency. Looking at the larger picture, this development is adding to the market visibility and that of across-the-board processes.

This ongoing transformation is perhaps the best for our logistics sector, which was earlier infamous for complicated processes, bottlenecks, and a near-absolute opacity. So, let us have a look at the emerging technologies that are changing the sector for good and driving it towards the future.

1) Blockchain in Logistics

Documentation (and its verification) is one of the biggest challenges experienced by the logistics players. This is precisely true for use cases such as procurement, transportation management, order tracking, and customs collaboration. These different areas are where Blockchain – the underlying technology that also powers cryptocurrencies – is making a sizeable difference. For the uninitiated, blockchain is a distributed ledger system shared by the interacting parties or individual stakeholders. Its entries (in the form of blocks) are synchronized throughout the network and cannot be altered once registered. If any modification has to be done, another block with the desired adjustment needs to be added to the string of blocks. So, data fabrication is by design impossible in the blockchain.

This aspect of the blockchain technology is today helping us address the areas of frictional in logistics with much simplicity. It is also optimizing the cost and the time associated with documentation and processing for ocean freight shipments. With a safe and protected gateway for information-sharing, blockchain is increasing transparency and helping us save costs by streamlining the supply chain process.

2) AI and ML for supply chain optimization

Machine Learning, a subset of the Artificial Intelligence technology, is also being used by logistics players to automate the supply chain and gather insights that otherwise remain concealed in the burgeoning data. These insights can be directly or indirectly related to tracking, the backend of logistics, internal functions, and so forth. They help in optimizing supply chain as well as in automating, streamlining, and hence, decreasing the turnaround time of various processes. The AI-driven approach is not only cost-effective and time-efficient, but it also plays its part in making the consumer experience more delightful.

3) Low-to-No Asset Networks

Given the sheer focus required to manage every process and the integration of such procedures to the broader logistics operation, emerging logistics providers are now entering the field of tech-driven shipping aggregation. These aggregators do not own any tangible assets such as fleet, cargo movers, warehouses, etc. They instead build a proprietary solution which is then used by individual players (suppliers, shipping players, etc.) as per their business models. This tech-driven approach optimizes logistics operations with the help of networks, technical infrastructure, and automation to reach out to buyers in an effective manner. Doing so also makes scattered demand (originating from an area) visible, helps in bundling them and transfers cost-efficiency to businesses of all shapes and sizes.

4) IoT for tracking

With the help of RFID tags, GPS, and specialized sensors, monitoring of packages is now being done in the real-time. Further coupled with specific approaches, such as geo-fencing, geo-tagging, and proximity alert, more bottlenecks are being eliminated from the supply chain. For instance, an incoming shipment can be easily traced, and the forward supply chain can be readied to process the shipment faster. This practice is enhancing operational efficiency, bringing about superior transparency, and decreasing delays in transfers.

5) Augmented Reality

High-value consignments have various security threats, including hijacking, that need to be eliminated. Here, Augmented Reality (alongside facial-recognition technology) is paving the way for secured deliveries within logistics operations. Last-mile delivery is also improving with building-recognition and indoor navigation. Similarly, the completeness of a parcel and warehouse planning is also getting enhanced with the introduction of Augment Reality in supply chain management.

6) Autonomous transport

Today, e-Vehicles such as self-driving trucks, ghost cargo ships (autonomous ships), and drones are driving us closer to the future of logistics. It is estimated that this development can save up to 20% of fuel costs by aiding transportation, warehousing operations, and last-mile deliveries. India has already passed its regulation for drones, and similar frameworks are in the pipeline for other use cases. Also, the introduction of 5G in 2020 and, with it, the advent of logistics 4.0 are something the industry has been looking forward to.

It is about time that the Indian logistics sector, as the economy is booming, stands shoulder to shoulder with its western counterparts. With the ongoing technological revolution, it is just a matter of years, and all we have to do is eagerly wait until this happens.

Mr. Saahil Goel, CEO & Co-founder, Shiprocket

Click on Deccan Chronicle Technology and Science for the latest news and reviews.Follow us on Facebook, Twitter.

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Swiggy- Delivering Food and Market Promises Since 2015

Very close to the occurrence of this came in Series D which brought in USD 15 million led by Bessemer Venture Partners. The company at this point …

Credits: Swiggy Blog

The story of Swiggy’s founders is one where they needed to be lost in order to find their actual passion and success that would come along with it. There were roadblocks, setbacks but down the line, we all know how high Swiggy is on the ladder today.

The Beginning

It all started when one of the founder Sriharsha Majety quit his job in London and came to India to pursue his entrepreneurial dreams. He didn’t have any networks in the start-up circuit and thus decided to plunge in all by himself. This is where he got into talks with one of the co-founders- Nandan Reddy.

Both of them saw a lot of potential in the unorganized logistics sector of India and thus took up the onus of building a logistics company called Bundl. The company provided logistics and shipping services for the e-commerce industry in a revamped consumer-friendly manner.

However, things for Bundle did not go as smoothly as expected. The founders needed someone who could bring the right technology in to create good functioning. They had to hesitantly contract the building of this tech and by the time the product was finished the market had changed rapidly.

Websites like Flipkart and Amazon had decided to build their own shipping services which is why Bundl’s market became smaller. Soon Bundl’s operations shut within a year.

But here is where things got interesting. They saw that Ola and Uber were hyperlocal aggregator apps. Thus they looked around and conceptualized the start of a hyperlocal delivery app and Swiggy came into being. During this initiation, they got in Rahul Janimini to do the coding for the online food delivery system.

Funding:

Swiggy began its first round of funding in 2015. The two companies that pitched in a total of USD 2 million, were called SAIF Partners and Accel, both are venture capital firms. In the second round in 2015, another firm- Northwest Venture- joined the former two and they raised 16.5 million USD together.

The Series C of Swiggys funding rounds got them USD 35 million from new ( RB Investments) and existing investors. Very close to the occurrence of this came in Series D which brought in USD 15 million led by Bessemer Venture Partners. The company at this point was worth USD 320 million.

In 2017 the funding venture was led by Naspers who contributes USD 80 million.

2018 has seen two of the biggest funding rounds already for Swiggy with Naspers and DST global coming in with a total of USD 310 million. At the end of the first round of 2018, Swiggy became the second food-tech unicorn in India after Zomato.

Growth:

Swiggy in 2014 started off with a small office in Koramangala in Bangalore. They had initially partnered with 24 restaurants and 6 delivery executives. But now the company has a large pan-metro-city presence.

Swiggy now operates with a massive force of 35000 restaurant partners and over 55000 delivery executives in across 15 cities in India. The cities in which it is currently present include Delhi, Mumbai, Pune, Bangalore, Hyderabad, Chennai, and Kolkata.

Because of its overall average delivery time of 37 minutes and inexpensive delivery charges Swiggy has quickly risen to the top of India’s online, hyperlocal delivery market.

To stay at the top is not an easy task and thus the company is constantly creating and presenting new ventures. This includes Swiggy Pop, Access, and Schedule.

Credits: Swiggy Blog

The Downs:

Swiggy got into a controversy recently when an anonymous ex-employee made many serious allegations towards the company’s business ethos. In his blog post on Tumblr, the employee said that:

“We are made to lie about our market share, as well as order volumes to restaurant owners. The worst part is that instead of helping these restaurants grow their business, we are trained to arm-twist them to increase our commissions every couple of months.

Some restaurants are paying us more than their net margins because Swiggy in some areas in Hyderabad and Bangalore has been able to become a significant portion of their revenues.”

He also went on to dismiss most of Swiggy’s claims related to the treatment of personnel and research initiatives. This story, however, did not receive too much traction from media houses.

It was also reported that a few restaurants have backed out from their services because of their low commission rates, unreliable logistics, irregular deliveries, and overall untrustworthy services.

The Ups:

Swiggy in 2018 has grown to be one of the biggest and youngest start-ups in India’s ecosystem because of its habit of continuously evolving.

It recently started a service called Swiggy Scheduled which allows customers to pre-order their meals. The initiative is already showing the signs of success.

It has also acquired the Asian food start-up called 48 East. The company used to previously deliver oriental cuisine and is now a branch of Swiggy.

Credits: Swiggy Blog

The Future:

According to company’s blog, a lot of growth is scheduled for the future. They plan on setting up cloud kitchens and introduce new services like delivering groceries and medicine. There has been a consistent increase in performance on the start-ups end. The same is expected in the future too.

Swiggy as a relatively young company is projected by experts to have a lot of potential. However, even in this short span, a lot of good has happened for the company and a lot has gone wrong too. The forthcoming years will be sure to tell if Swiggy is here for the long haul or its successes were only shortlived.

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Jack Ma goes all-in on smart logistics infrastructure network

In 2015, the company founded ET Lab, an R&D unit that focuses on the development of emerging technology and applications in logistics.

In a surprise appearance at last week’s Cainiao’s Global Smart Logistics Summit, Chinese tech tycoon Jack Ma announced that Cainiao Network, the logistics affiliate of Alibaba, is going to invest more than RMB 100 billion ($15 billion) to build the technical backbone for a smart logistics network aimed at improving delivery reach and efficiency. (Read our live blog of the event for a blow-by-blow of the speech).

To emphasize the company’s commitment, the Alibaba chairman added that “We will increase the investment to several hundreds of billions RMB if that’s not enough. Alibaba will bet a vast majority of our resources on it because we believe a better logistics infrastructure network could bring fundamental changes to the manufacturing industry.“

Thanks to the exponential growth of e-commerce industry, China’s logistics landscape has undergone massive changes in recent years. Ma noted that the industry started from zero parcels generated by e-commerce to now delivering 130 million parcels per day, while there are about 5 million people working at courier and food-delivery companies in the country, and seven delivery companies have gone public.

While the growth trajectory of the logistics industry shows no sign of slowing down, it is a no-brainer why the tech giant is taking huge bets on the logistics business. Cainiao wants to eventually ensure single-day delivery across China and 72-hour delivery worldwide. Here’s how they say they will meet that goal.

A smart network powered by cutting-edge technologies

Despite the surge, the logistics industry is labor-intensive, Ma pointed out. “This growth is rooted in the hands and on the shoulders of millions of deliverymen, but I believe it’s going to be driven by mental labor in the future.” A top exec from China’s top logistics company admitted at the event that their deliverymen don’t really benefit from company growth because their salary is still largely determined by how many parcels they can deliver.

As a technology-driven socialized logistics collaboration platform, Cainiao has been working on the application of cutting-edge technologies in the logistics industry since its establishment five years ago. In 2015, the company founded ET Lab, an R&D unit that focuses on the development of emerging technology and applications in logistics.

At last week’s event, the company showcased the first Cainiao Future Park, featuring intelligent management at a large scale. The Future Park has cutting-edge technologies, such as Long Range (LoRa)-IoT, edge computing and artificial intelligence, introduced the company. Sensors are installed in the Park’s infrastructure system and, through the LoRa network, meters that monitor the water, electricity, temperature and humidity conditions can report in real-time.

Of course, application of technologies goes far beyond large-scale management solutions. By using AI technologies, Cainiao has developed an agile automated warehouse system that enables a large number of robots to work collaboratively in warehouses, creating an efficient end-to-end warehouse automation solution.

Inside the smart warehouses, packages are processed on completely automated assembly lines equipped with robotic arms and over 500 AGV (Automatic Guided Vehicles) robots are on the floor for fast product pickup and delivery. The automation is expected to save warehouse staff some 50,000 steps per person per day.

If you can’t see anything, try QQ video instead.

Cainiao’s ET Lab has been tinkering with its driverless delivery vehicles over the past year. Zhang Chunhui, head of ET Lab told TechNode that the company is applying the technology in two different use cases: the autonomous driving trucks for long-distance delivery and driverless vans for intra-city delivery.

“We are developing highway autonomous driving truck fleet in partnership with FAW Group Corporation, a Chinese state-owned automotive manufacturing company. We call it ‘high-speed railway for trucks’, Zhang introduced.

For last-mile delivery, Cainiao’s ET Lab has two major products– “Little G” and “G Plus”. Equipped with a multi-sensor navigation system that includes 3DLidar, cameras and X-ray sensors, G Plus can achieve high-precision navigation through 3D modeling.

“Instead of laser radar, G Plus it uses MEMS (Micro-Electro-Mechanical Systems). It will cut almost two-thirds of the cost as compared with traditional solutions, facilitating the mass production of driverless vans,” he added. G Plus can go at a speed of 15 miles per hour. This speed makes sure it’s more efficient than human but won’t cause any security concerns in city, according to Zhang.

Little G is already being used on Alibaba’s campus. G Plus is currently in road tests and the plan is to come to commercialization end of this year.

While still at an early stage towards its full digitalization, the logistics industry has multiple options and paths to take. Compared with its competitor JD, which put bets on both driverless vans and drones, Alibaba put most of its resources on autonomous vehicles for last-mile delivery.

“We believe heavy unmanned aerial vehicles for large and long-distance cargo delivery will have better application prospects. Small drone for last-mile delivery still faces lots of problems, like security, regulation, and stability. But it’s a matter of choice based on the scenarios and the company’s current resources and research background,” said Zhang.

A connected network empowering partners

“This network was established by Cainiao, but it doesn’t belong to Cainiao. It belongs to all logistics companies. Logistics companies are Cainaio’s most important partners … we need to provide our partners with core technology and core products to make our logistics partners stronger,” Jack Ma noted at the speech.

Alibaba does not operate a self-owned logistics infrastructure but uses Cainiao to build a logistics network of delivery firms. Without direct competition, Cainiao is becoming increasingly integrated with logistics partners.

Last week, Alibaba Group and Cainiao Network joined a $1.38 million funding in China’s top express delivery company ZTO Express in exchange for an approximately 10% equity stake in the company. Under the agreement, Cainiao and ZTO will deepen collaboration from delivery and warehouse management to technology.

In the Future Park project, Cainiao only provides the overall intelligent solution to its warehouse partners, helping existing warehouses to upgrade their management systems and improve efficiencies. On top of that, it’s up to the warehouse operators to determine the scale and timeframe in adapting the solution.

“The openness of Cainiao’s services and solutions is determined by the Taobao ecosystem,” explained a Cainiao spokeswoman. JD operates its own marketplace and logistics infrastructure, so they can predict the growth trajectory and make corresponding warehouse upgrading plans. On the other hand, Alibaba’s marketplaces consist of millions of retailers. Orders could be very diverse and complex, and it is difficult for warehouses to meet the demands of e-commerce business that have peak and slow seasons, so it’s better to provide agile upgrading plans.

A global network links China and the rest of the world

Alibaba’s global vision is one of the key reasons for what the company has achieved so far and the mindset is shaping Cainiao’s future.

This network is not only national but also global. Cainiao’s global network will support 72-hour delivery across the world, starting from countries and regions involved in China’s Belt and Road Initiative.

“World trade will change because of logistics. Global trade will go from containers to packages, from trading between countries to trading between companies. All this change, we should be ready to prepare and fight today,” Jack Ma explained.

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