Amit Saberwal, Founder and CEO
Prior to launch RedDoorz Amit Saberwal spent 20 years across roles in the hospitality and travel tech industries, including time at MakeMyTrip where he was chief business officer.
Plans for RedDoorz this year include expansion across Indonesia, the Philippines, Vietnam and Singapore. The company has grown to offer more than 1,500 properties on its platform across over 100 cities.
RedDoorz has raised several large rounds this year to be invested in new markets and technology development, can you share how those plans are progressing?
RedDoorz’s growth is on track. We are looking at strategically expanding our footprint across Southeast Asia and opening up new markets within the next six to 12 months.
We have just announced our new regional tech hub in Vietnam recently. The new hub will complement our primary tech team based out of India to boost our tech capabilities in the region.
In addition, we intend to increase our market share and will continue solidifying our position as the market leader in the affordable hospitality space in Southeast Asia, where we already operate the largest network of hotels.
The low-cost segment and the dependence on mobile are key drivers to growth in the travel industry in Southeast Asia currently. RedDoorz ticks the first box, how is it ensuring it ticks the second?
At our very core, we are a tech company and have built our brand upon strong tech solutions. The future of our business is technology-enabled and technology-driven so as to sustain continuous growth.
We have developed our own proprietary tech solutions such as RedFox, our dynamic pricing and inventory management tool for revenue optimisation and operational excellence. The tool allows RedDoorz to streamline our revenue optimisation processes while also improving the efficiency of various operational tasks.
We also have our own mobile app and online site to bring customers the convenience of having the choice of many property options at their fingertips. 75% of our bookings are made directly via the RedDoorz app – which shows that we are successful in engaging with our customers digitally.
There is a lot of talk about platforms versus super apps currently, do you see RedDoorz staying true to its core business of budget hotel distribution? Any plans to diversify or add services?
We are constantly building on our deep understanding and knowledge of the Southeast Asian consumer by leveraging key data and insights, to test out new product lines and services that will cater to their immediate needs and desires.
With the amount of funding going into what is being called “alternative accommodation”, some are concerned it might be a bubble, what’s your view?
According to The Asia Pacific Chains Report 2018, it is estimated that the overall size of the Asia Pacific market to be just over 120,000 hotels with over four million rooms.
The hospitality industry is a multi-player market, and we believe that the budget hotel market in Southeast Asia still has ample space to grow.
As per the latest report by Google-Temasek, Southeast Asians are the most engaged mobile internet users in the world.
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There are 360 million internet users in the region, and 90% of them connect to the internet primarily through their mobile phones.
These internet users communicate with their families, friends, and colleagues, and they entertain themselves, learn new skills, and become more productive.
Increasingly, they buy products, trips, and food online. All this takes place millions of times every day across the region. A vision that was almost impossible to imagine is now daily routine.
Powered by these fundamental changes in consumer behavior, the internet economy continues to grow at an unprecedented pace. It has soared to $100 billion for the first time in 2019, more than tripling in size over the last four years. ecommerce and ride-hailing continue to beat the most optimistic of predictions.
Other strong areas are online media and online travel, that continue to grow at a steady rate, with ample room to expand further.
By 2025, the internet economy is expected to grow to $300 billion. This is the opportunity RedDoorz saw in 2015 when we launched in Indonesia, a country with one of the largest domestic tourism traffic in the region.
We are careful to not spread ourselves too thin, too far, too fast. Our aim is to provide hyper-local solutions, sometimes even at a city level. Our deep understanding of the regional landscape is what differentiates us.
Does raising all this capital place additional pressure on the company and are further rounds on the cards?
We see it as positive encouragement that our investors trust and believe in our capabilities and our potential for growth. Their faith in us pushes us to grow and improve the company.
Right now, we are looking to close the Series C round, spread our wings deeper into our operational markets as well as enter a new market like Thailand in 2020.
RedDoorz is often described as a challenger to OYO - where are the similarities and what do you feel makes you standout?
We take a hyper-local strategy derived from our understanding of the Southeast Asian market since we are a home-grown brand – especially those (Singapore, Vietnam, The Philippines and Indonesia) in which we operate in.
We are careful to not spread ourselves too thin, too far, too fast. Our aim is to provide hyper-local solutions, sometimes even at a city level. Our deep understanding of the regional landscape is what differentiates us. We have a strong understanding of the consumer in Southeast Asia at a granular level from country-to-country, city-by-city, and even district-by-district.
OYO sticks out in terms of its rapid expansion to many geographies in recent months, how does your growth strategy differ?
We see this as an opportunity to continue to innovate more. We are very geographically focused by taking a conscious and prudent approach to focus our efforts on Southeast Asia.
This is because Southeast Asia is a very fragmented market and we need to ensure that we have a deep understanding of the customers we serve.
Our knowledge of the Southeast Asian landscape is what really sets us apart.
For example, Indonesia, one of our key drivers of growth, has a huge population of 264 million with a rising middle class and a robust domestic travel ecosystem.
Do you think online travel giants are eyeing your business in terms of competition in the space? Does it make you an acquisition target?
We are operating a network of more than 1,500 properties and we aim to have 15,000 hotels in our network by 2023. We are currently tracking at pace of high-growth, and have only scratched the surface.
According to Google and Temasek/Bain, e-Conomy SEA 2019, online travel has grown to US$34 billion with a strong and stable base of users who are travelling more frequently for leisure and business, both domestically and internationally.
We believe that we still have some ways to go in terms of extending our reach deeper into our existing markets and growing into new ones, but we’re on the right track.
What other digital brands in Southeast Asia, not necessarily in travel, do you look to for inspiration?
There are some incredible brands in Southeast Asia that are doing ground-breaking work, that we truly admire. But when we look for inspiration, we look at the individuals who have been behind some of the biggest ‘success stories’ in this part of the world.
One of them being the founders of Asia Partners. The firm led our recent funding initiative and invested in RedDoorz at the latest Series C round.
To give some background, Asia Partners has been set up by two very enterprising individuals, who in their own right have played a strategic role in building the internet revolution in Asia.
Oliver Rippel, prior to starting Asia Partners, was the CEO of B2C e-commerce for Naspers, which included all etail, marketplace, and travel operations globally.
Oliver led all of Naspers’ investments in Flipkart, where he served as Naspers’ appointed Director to the Board for six years.
In August 2018, Flipkart’s exit to Walmart was one of the largest exits ever in the Internet and ecommerce space, and India’s largest ever exit of a technology company.
As part of this transaction, Naspers sold its 11.2% percent stake for $2.2 billion. The investment was a $1.6bn or 3.6x return over six years, at an estimated 29% IRR.
The second founder of Asia Partners is Nick Nash - one of the most recognised and respected faces in Southeast Asia in the entrepreneurial world.
Nick was the group president of Sea, Greater Southeast Asia’s leading internet company with a ~14Bn market cap, from 2014 to 2018.
Nash led Sea’s landmark IPO on the New York Stock Exchange, which raised approximately $1 billion of primary capital and which was the largest ever U.S. IPO of a company from Southeast Asia.
So for us, such individuals become our inspiration. They have joined us in our journey of high growth, and their experience and deep understanding of the ecosystem in Southeast Asia has been, and will continue to be of immense value to us as we scale across the region.
What do you think has been the main reason why so many western online travel brands have failed to make a mark in Southeast Asia?
Southeast Asia is a highly-fragmented market that takes time to understand.
In a region where 10 official languages coexist with hundreds of local dialects, there are different behaviour patterns and socio-cultural nuances as well. We are a local company based in Singapore, part of Southeast Asia, and that helps us understand the region and our existing markets better.
RedDoorz has managed to establish itself as we take a hyperlocal approach instead of macro perspective. We take a city-to-city approach to grow, and only when we reach a certain threshold within a city will we expand to the next. We ensure that we understand the city we operate in before expanding to another.
What experience from previous roles such as MakeMyTrip did you bring to RedDoorz?
Prior to my role at MakeMyTrip I used to be a hotelier. Then in the early 2000’s I moved to this internet company (prior to the internet being readily accessible or mainstream in the country).
Over the years, MakeMyTrip went onto become one of India’s most renowned startup success stories.
MakeMyTrip brought me to Southeast Asia almost a decade ago. It was during this time that I was fortunate enough to travel across the region to see first-hand the struggles of property owners - from securing occupancy and surviving in a highly competitive space to scaling their businesses - especially as the digital revolution crept in.
It’s these key plights that ultimately led me to starting RedDoorz.
MakeMyTrip taught me the art of scaling and how the effective use of technology can play a vital role in localising and personalising solutions for the industry at large. It truly was a disruptive player ahead of its time, and I believe RedDoorz is doing the same today in Southeast Asia.
What keeps you awake at night?
How do we ensure consistency in delivering market-leading customer service whilst rapidly scaling our business.
We are continuously innovating as a company, developing new and improved ways of working. Our employee training programs (including those we offer to employees of our partner hotels) aren’t just robust, they’re class-leading, and we’re now in a position to enhance these offerings.
The good thing is, we have a pool of worldclass talent at RedDoorz, so I wouldn’t say that it’s something that “keeps me awake at night”, but it is something I find myself thinking about quite often.
What was the last book you read?
The last book I read was called Built To Last, Successful Habits of Visionary Companies by Jim Collins and Jerry Porras. It was an insightful read, one that highlights a common thread that can be found in the most successful and long-standing companies we see, hear and read about today.
Who do you most admire in the travel industry and why?
It’s difficult to put everyone whom I admire in this industry into one bucket, as there are so many. If I had to choose, I’d be hard pressed not to mention Rajesh Magow, co-founder and CEO of MakeMyTrip, and Deep Kalra, CEO of MakeMyTrip in India.
I had the pleasure of working with both of them, and to see how far they’ve come and what they’ve achieved with the company is nothing short of inspirational.