2025-01-16 04:15:51 :
(Bloomberg Opinion) — Meerut, an hour’s drive from Delhi and with a population of just a few million, is considered a small town in India’s crowded north. There isn’t much to recommend to tourists and it doesn’t receive large groups of tourists. However, the city’s hotels have been in the news lately.
SoftBank Group-backed Oyo hotel chain announced last week that it would no longer allow unmarried couples to stay at its hotel in Meerut and may extend the policy to other towns. In theory, if the guest cannot provide proof of their relationship, the reservation could be canceled.
Naturally, this policy caused an uproar. It also highlights how increasingly difficult it may be for businesses to navigate India’s deepening social and political divisions.
Oyo said it “respects” individual freedoms and personal freedoms but also feels obliged to respond to complaints from what it calls “civil society.” Few doubt that the term, in this case, is a euphemism for socially conservative right-wing groups that claim growing political influence under India’s Hindu nationalist government.
Of course, companies everywhere have to manage local politics. But companies operating across the country cannot afford to give up too much. Compromise in one part of the country can reduce trust in a brand in other parts of the country. Isn’t the core of the brand the promise of a unified experience?
Granted, Oyo has so far limited its new rules to one city. But in Bengaluru, the more famous tech hub, activists are now calling for a similar ban there. Will Oyo be forced to surrender? Will the company expect couples to keep track of when they need to carry a marriage certificate while traveling from city to city across India?
When Oyo launched almost a decade ago, it promised exactly the opposite. Checking into a budget hotel in an unfamiliar town with your partner used to be a stressful experience; couples never knew whether they would be the target of harassment or be denied accommodation. As one Indian columnist put it, Oyo “democratizes access to private spaces for an emerging young population.” This is the company’s core value and a major source of its appeal.
Oyo is not the first company to find itself in trouble due to divisions within India. Food delivery service Zomato Ltd., the first app-based startup to be included in the BSE Sensex benchmark, has drivers who sometimes object to delivering pork or beef dishes on religious grounds. Like Oyo, Zomato sometimes tries too hard: last year, the company briefly announced a new quarantine service for vegetarians, only to face a nationwide outcry that forced it to withdraw it.
Economists and officials sometimes argue that “mass services” – including hotel chains and delivery services – can provide jobs and growth that the country’s lackluster manufacturing sector cannot. Many of these companies have scaled rapidly, reaching tens of millions of users and including some of India’s fastest-growing employers. In turn, they tout the sheer size of the potential market to attract investors.
However, with size comes diversity. And, unlike a toy manufacturer or a seller of detergent, a service company must treat its customers as human beings. There’s no point in achieving scale at the expense of your brand’s core appeal.
Regardless, companies trying to keep up with unpredictable political trends may spend too much time overcorrecting. Perhaps ironically, Oyo decided to get into social policy the same week that Meta Platforms Inc.’s Mark Zuckerberg reversed eight years of content moderation policy. Policies started for political reasons will have to be abandoned for political reasons. The biggest losers are often the companies caught in the middle.
Indians have high hopes for startups that appear to be vibrant and world-class. These companies, in turn, rely on India’s vast scale to secure their wealth. However, if they don’t learn to manage India’s diversity, they almost certainly won’t.
More views from Bloomberg:
This column does not necessarily reflect the opinions of the editorial board or Bloomberg LP and its owners.
Mihir Sharma is a Bloomberg Opinion columnist. He is a senior fellow at the Observer Research Foundation in New Delhi and the author of “Restart: The Last Chance for the Indian Economy.”
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