Oyo Inaugurates "Oyo Life" Boarding House Residential Business Vertical in Indonesia

Oyo brings business verticals that are engaged in long-term housing or boarding houses to Indonesia with brand "Oyo Life." Indonesia is the third country visited by Oyo Life, after India and Japan.

Oyo Indonesia Country Head for Emerging Business Eko Bramantyo explained, the boarding house market in Indonesia continues to thrive, driven by high demand and the potential for developing a large business chain including catering, laundry, house keeping, and others.

In Asia, the use of co-living space become an integral part of the millennial lifestyle. The studies he cites show that 70 million Asians choose to live in boarding houses, with a total of one third in Indonesia (estimated 23 million).

The 1 H2019 Property Affordability Sentiment Index data shows that rising house prices are one of the main reasons Indonesians are not in a hurry to buy a house. That's why most who are just starting their careers tend to choose to live in boarding houses until they get permanent residence.

"Our decision to bring Oyo Life to Indonesia was partly due to requests from our property partners who encouraged Oyo to participate in managing the property to the boarding segment. Looking at our achievements in less than a year, we believe this is the right time," he explained, Wednesday (9/10).

It should be emphasized that Oyo's expansion to this boarding house is part of the $300 million investment (equivalent to 4,2 trillion Rupiah) in Indonesia which was announced a month ago.

Oyo's status is now officially decacorn (valuation above $10 billion), after securing $1,5 billion (approximately IDR 21 trillion) in funding from its own CEO Ritesh Agarwal, SoftBank and other investors.

Globally, Oyo Life has only been present in three countries and is claimed to have experienced rapid business growth in less than a year. Since operating in India in October 2018, Oyo Life has acquired more than 500 buildings, providing 30 thousand mattresses, and each month adding 5 thousand new mattresses.

While In Japan newly inaugurated in April 2019, has acquired 1000 keys spread over 20 points around Tokyo. At the launch in Indonesia, Eko said that his party was present in eight cities with 2500 rooms. The locations are in Jakarta, Bekasi, Bogor, Padang, Solo, Yogyakarta, and Surabaya. It is claimed that the occupancy rate is at 80% in 30 days.

Unmitigated, he targets that by the end of the year Oyo Life can have 10 thousand rooms in 10 main cities in Indonesia which have a high population of young professionals and students as their main consumers. In these 10 cities, there are potential 2 million boarding rooms that can be acquired.

Oyo Life business model

Although departing from abroad, Oyo is not solely direct copy paste Oyo Life's business model to Indonesia. There is a striking difference in the lifestyle of boarding house residents abroad, which is finally adapted to the habits of Indonesians.

Among them is the key concept, how many keys can be rented out. This is a count to show the achievements of Oyo Life's business. Because, abroad, sharing a room (shared room) with strangers is normal.

"Unlike Indonesia, here we are not used to shared room. That's why we use the term room, not key because Indonesians like privacy."

Next is the habit of interacting with each other. Abroad there is no such thing because the people are more individualistic. That's why here Oyo provides community-based activities for each other commits each other between residents.

If you are interested in having assets managed by Oyo, the general requirements are to have a property with high ceilings, a large enough room, and a minimum of 10-15 rooms in one building.

"Later there will be a QC team in the field who will check, then there are paper work for the agreement. After agreeing, our team will renovate the property, we invest in it, about two weeks to complete."

Not only property restoration, staff from property partners will be trained regularly so that they can provide hotel-standard services.

In terms of technology and services provided by Oyo Life to property partners, there is no significant difference with Oyo Rooms. Property partners are provided with an application that can monitor all business processes remotely. This added value is what is claimed to distinguish Oyo Life from its competitors.

"Oyo service is classified as full stack from upstream to downstream, after the assets are restored, we will also market, manage operations, and make payments, the owner doesn't have to take care of it anymore."

Eko is reluctant to reveal the percentage of profit sharing between property owners and Oyo because the range is quite varied. However, judging from the range of boarding houses in the vicinity, the rental price at Oyo Life starts from Rp. 1,5 million to Rp. 4,5 million per month.

The facilities provided range from internet connection, air conditioning, television, internet services house keeping, CCTV cameras, and 24 hour service. If there are complaints, residents can simply contact the Oyo Support team at no additional cost to the monthly rental price.

"If you want extend cost is quite flexible. The payment options also vary. If someone pays late, of course there is approach what we do is directly from Oyo, not from the owner of the boarding house."

Eko revealed that Oyo Life will be available as a separate application from Oyo Rooms. The plan is to launch in the near future. Meanwhile, it can be accessed via official site, and other OTA sites that Oyo uses to market its properties.

In Indonesia, Oyo is present in 100 cities with a total of 35 rooms spread over 1.000 hotels from Sabang to Kupang.

Boarding players are getting more and more crowded lately, before there were RedDoorz, Mamikos, and RoomMe.