Rebranding for a Fresh start
Rebranding is a tricky and expensive business. Companies loathe having to start afresh, unless public relations disasters, acquisitions, mergers, or a business slowdown force their hand. Over the past year, however, India's bustling start-up community has seen a rebranding rush without any looming crisis at hand. This year, Quikr, Zomato (twice in three months), Housing and several others have spent millions remodeling themselves.
The latest to join the list is Stayzilla. Its 33-year-old founder Yogendra Vasupal says that around December last year he felt the need to rebrand his 10-year-old company. Over the last six months, Stayzilla has already spent an undisclosed sum of money getting a new logo and a new tagline and, for the year 2016, Vasupal says, he has a budgeted "$150 million, to be raised through an unannounced round of funding, as marketing and promotion expenditure". A quick reality check is due here; another start-up, Housing.com, hugely extravagant with its advertising and marketing budgets, has said that it will spend close to Rs 200 crore this year and Paytm, which is licensed to set up a payments bank, has budgeted Rs 500 crore. Stayzilla, a marketplace for apartment owners and travelers, outstrips both with its estimated spends (nearly Rs 900 crore).
Shifting identities, soaring budgets
Cash, it seems is no constraint for start-ups, flush with funds from investors. Neither is standard branding logic as many start-ups think nothing of changing their colours even before the paint is dry. Is it the changing business environment, or is it easy money, or the shifting nature of the digital world that is driving the makeover rush?
"There is no rule of thumb when it comes to e-commerce companies. Start-ups don't have a long legacy to change and it is easier for them to switch strategies and branding styles within a matter of months," says Anand Halve, co-founder of Chlorophyll, a Mumbai-based brand consultancy. But he believes that the penchant for punchy taglines among the start-up community may be a bit misplaced, "even passe, because businesses are so diverse and are rapidly evolving, there is no use to have a line".
For Stayzilla, however, a tag line seems to be quite important. The Bengaluru based company started life as Inasra ten years ago; within five years, it had changed its name and positioned itself as a marketplace for budget stays (hotel rooms and apartments). Its tagline then was 'Any room, Any budget, Any zilla'. As part of the ongoing re-branding exercise, it has adopted a Tamil phrase for a tagline -'Yaadhum Oorey, Yaavarum Keleer' (everyplace is home, everyone is kin) to drive home its local roots.
Not another Airbnb
Why did the brand go local? One reason could be its desire to differentiate itself from global unicorn (companies withvaluations over a billion dollars) Airbnb. With new companies entering the overheated budget hotel space and with Airbnb coming to India Vasupal says, "The conversation has been shifting for a while." By choosing a Tamil phrase, the company is wearing its local colours on its sleeve. Also, experts say it may be targeting the southern market where the number of home stays is higher, before making a play up north. And while Stayzilla does not want to bring in the comparison, it helps set it apart from Airbnb.
Cornered in a crowd
Stayzilla saw value and supply shrink as new and nimble ventures such as Oyo Rooms and Zo Rooms jumped in. Vasupal says, "They were pouring in money and the branded hotel chain business was discounting heavily. I didn't want to play the discount game. My VC money is for the company to grow not to make others rich." The company found itself pressured to discount its already discounted inventory of rooms.
"But there were rooms people could live in, if only they were made available," says Vasupal. And that's when he decided to take a leaf out of Airbnb's playbook and invest in Social Stay (this converts the marketplace into a Facebook like platform where travelers and homestay owners can check each other out and strike a rapport before jumping into a transaction). It is, in a way, like an application that matchmaking sites use to pair people. Stayzilla says that the acceptance or denial of a booking depends solely on the conversation the host has with the guest. "We have a tool (patent pending) that lets only those who have common interests contact you and get in touch," Vasupal says.
With a new model in place and the need to stand apart from the crowd, Stayzilla felt it was time to shift the mandate for the brand from value to comfort. "Ultimately, we want to reach a place where Stayzilla's brand is associated with experience," Vasupal says. Get ready for the decibel levels to rise as Stayzilla throws money and muscle to get its show on the road.