At a time when budget hotel room aggregator OYO is testing the waters in international markets, its arch-rival, Treebo Hotels, is looking at new revenue streams within India.
Treebo Hotels has announced the launch of its new mobile app — Hero — aimed at tapping into traditional offline sales channels with a view to expanding its customer base and creating new avenues for sales.
With the Hero app, Treebo aims to target intermediaries such as auto-rickshaw and cab drivers, individual agents, small shopkeepers, and others who typically operate at airports, railway stations, and bus stands.
Founded in June 2015 by Sidharth Gupta, Rahul Chaudhary, and Kadam Jeet Jain, Treebo Hotels is a technology-enabled budget hotel brand. At present, the company claims to have an inventory of 10K rooms and 400 hotels in over 85 cities. It has so far raised $57 Mn in three rounds of funding.
Sidharth Gupta, co-founder of Treebo Hotels, said, “As a hotel chain, we have always used both online and offline channels to drive sales for us, and we have deployed technology to drive convergence between them. With the launch of Hero, we are tapping into another potent sales channel — local offline intermediaries. With this, we are looking at creating opportunities for such micro-entrepreneurs to enhance their incomes and become part of the digital economy.”
Hero’s Twin Approach: Generating Sales By Providing Opportunities To Locals
The Hero app takes a two-pronged approach to increase Treebo’s sales and help the local economy. On one hand, it will create an additional layer of revenue for local offline intermediaries such as cab drivers, shopkeepers, and others. On the other, this strategy will enable the company to build a large base of commission-based sales people, saving both costs and efforts of maintaining a regular workforce.
The intermediaries may also include urban, educated individuals seeking part-time employment, such as homemakers, college students, retired individuals, and others looking to supplement their income.
Treebo claimed that the Hero app has an easy-to-use interface that just requires an Internet connection and a smartphone. The app offers full entrepreneurial flexibility to users, including deciding their own commission levels.
By bringing this traditional offline activity into the formal online space through Hero, Treebo will be able to drive higher awareness about its services and amenities through the direct recommendation of these intermediaries.
It will thus allow Treebo to tap into a new customer segment that has conventionally transacted with and trusted these offline intermediaries only. The app is currently available on Google play store.
Leveraging Resources: A Shared Economy Perspective
Entrepreneurs globally have understood the importance of the sharing economy, as is evident from the business models of co-working spaces such as WeWork, homesharing platform AirBnB, carpooling apps such as Wunder, logistics P2P platforms such as Carrymates, and others.
All these platforms are leveraging existing resources to run their platforms and earn revenues while enabling local intermediaries to earn money.
Many companies are also using their existing infrastructure to create new revenue streams for their existing workforce. Earlier, a similar initiative was taken by auto aggregator and hyperlocal startup Jugnoo. It introduced an on-demand concierge service provider — Fatafat — to cater to all kinds of delivery needs of users.
Fatafat was built as a chat-based interface enabling users to send requests, provide details of pickup and drop locations, choose the product/service to be delivered, and place the order. The request is then completed with the help of Jugnoo drivers, thereby helping drivers to earn more and also increasing user engagement on the Jugnoo app.
The Hero app is quite a smart move by Treebo to enter this space with a quid-pro-quo business model. Local intermediaries such as cab drivers and shopkeepers are often the first point of contact for travellers, who are in a position to advise them on places to stay. The Hero app will enable these locals to earn commissions and open up an entirely untapped revenue stream for Treebo.
While the company may have to struggle with trust issues initially, as many people do not trust accommodation suggestions by locals, it has its already established brand name on its side. It should be able to overcome this hurdle through proper marketing and training campaigns.