Zoho eyeing rural UP as its next destination in India

As India emerges as its third largest market, after the US and EU, the global SaaS company, Zoho Corporation, is gearing to spread its rural footprint in the country, stretching beyond its present focus in the southern states, to enter Uttar Pradesh.

“India is the hottest market today…In three years, India will become the No.2 market for us and in seven to 10 years, it could replace the US as the No.1 market,” Sridhar Vembu, CEO, Zoho, told media persons at his Tenkasi hub office on Monday.

He added the company is planning to open a hub in eastern or central Uttar Pradesh to tap into the rural talent in north India. “I will not go to Noida or western Uttar Pradesh. I will go to eastern/central UP because this is a demographically rich region in the country. More children are born there and we feel we should be there to invest in them,” Vembu said.

Working out of a tiny office in a remote village in Tenkasi, a picturesque town in the Western Ghats, located 630 km from Chennai, since 2020, Vembu said Zoho will focus on expanding its rural presence by launching more offices under the hub-and-spokes model. Zoho currently has five hub offices and 30 spoke offices in India.

Hubs coming up at a tier-II or tier-III city can accommodate over 1,000 people each with three or more spokes under it, in interior villages, with each employing 100 persons. Zoho launched its Tenkasi office in 2011, but the hub-and-spokes model became a huge hit during the Covid-19 pandemic, as many wanted to get back to their roots.

“We will launch our new hub offices near the cities of Madurai, Coimbatore, Tiruchirapalli, and Tirunelveli very soon. We also plan to have one in Thanjavur, which is my dream,” Vembu said.

Zoho has made inroads into several new markets, such as, the Middle East, Latin America, Africa, and Mexico. This was enabled by the company containing its marketing and sales budget to just 20% of the total spend, Vembu said, making it attractive to customers. Further the diversification in terms of product portfolio, geographic coverage of revenue and regions, has cushioned the company from the ongoing global crisis and Vembu assured that they will not resort to lay-offs.

The company’s distributed workforce model reflects the idea of distributing growth and income across Tier 2 and 3 cities, instead of urban concentration with many of Zoho’s product development teams working out of hub-and-spoke offices, including a few teams involved in deep-tech research and development.

The long-term vision of these efforts is to create self-sufficient and economically prosperous rural communities, Vembu said, adding that the model has created a revolution of sorts within the company with several employees, including those who have spent a few decades with the firm, opting to move to rural offices.