19 Feb Co-working takes China by storm
Co-working spaces in China
The future of office spaces in China is co-working. The market, currently valued at five billion yuan ($800 million USD), continues to grow year on end with several co-working companies locked in fierce competition for a potential market of a further three trillion yuan ($480 billion USD).
Old fashioned, state-owned offices are on the decline as new and innovative spaces are capturing the attention of a younger working generation. It is also not only the office culture that allures these businesses to sign up, but the Chinese co-working spaces are also very economic decisions as businesses need to consider their budgets.
So, what do these co-working spaces offer over the out-of-date, traditional environment? Here are number of the major players in the industry [click on the name to be directed to the company homepage].
Note that while prices will vary by location, amenities and services, you can expect a basic desk to cost around 1000 RMB/month. Please check each individual company for their own specialized offerings and price packages.
A behemoth in the co-working industry, the New York based WeWork has expanded to nearly 300 co-working offices in 15 different countries, with a client base of over 120,000 businesses. Since entry into the Chinese market in 2016, WeWork has experienced an annual compound growth rate of 300% over the past two years. It currently ranks as the world’s fourth largest unicorn.
WeWork’s growth in China has been unprecedented, going from 1 to 56 offices in just 30 months, as well as purchasing NakedHub, a large co-working space company in China for 2.5 billion yuan ($300M USD). This move has set WeWork to grow its Chinese community base to one million by 2021. Enlarged, the company will heavily compete with several other established co-working rivals including Ucommune (previously UrWork), SOHO 3Q and ATLAS.
Internally, WeWork does a better job in personnel management than other traditional office-renting companies, resulting in much talent hopping on board. Among futuristic co-working spaces, a core factor driving occupancy rate is compatibility with the culture of the younger generations. WeWork fulfills this requirement through innovation and internally-planned designs that create atmosphere suited to younger people. Furthermore, WeWork’s use of technology to optimize productivity and the office experience is something that many Chinese companies cannot easily replicate. WeWork, however, is still facing some challenges in China as of 2019 in filling up spaces among its newly opened buildings – we will have to observe how WeWork tackles this challenge.
In most recent news – January 2019, WeWork revealed it had closed an investment deal with Softbank worth $6 billion USD to re-brand the company into “The We Company”. This move is meant to bring together all of WeWork’s ambitions, products and services. Post-deal, WeWork is now valued at $47 billion.
– Standalone private offices (20-250 staff)
– Private offices (1-100 staff)
– Office suites (25+ staff)
– Hot desk (startups, small companies, freelancers)
WeWork’s big Chinese rival Ucommune, previously known as UrWork, claims over 120 locations situated in 22 cities in China, Singapore, New York and London. Its client base is comprised of over 5,000 companies and 120,000 individuals. Some of the cities in China Ucommune operates in includes Beijing, Shanghai, Shenzhen, Nanjing, Xi’an and Tianjin. Ucommune was founded by Mao Daqing, a real-estate veteran who previously sat on the senior executive board of the Chinese real estate developers, CapitaLand and China Vanke.
The Ucommune vision believes that successful co-working spaces should, apart form providing a comfortable amount of physical space, also deliver smart, integrated services to businesses in their office complexes. For example, Ucommune has gone further to place a business consulting form at its Beijing locations to assist their client start-ups in processes such as applying for government subsidies and complicated regulation paperwork.
In 2018, Ucommune has been on an acquisition shopping spree in China, buying out six coworking space companies in this year alone. By making these Chinese company acquisitions, this puts Ucommune is a position to compete against WeWork China to provide co-working services for the market. Currently, Ucommune is valued at $3 billion USD.
One major point of difference between WeWork and Ucommune is that the latter is a domestic Chinese company whereas while WeWork is based in New York. Operating on home turf offers advantageous avenues for Ucommune and provides it the boost it needs to compete with foreign investment flowing into WeWork. It will be interesting to see who comes out on top in a classic case of domestic versus foreign competition.
– Private office
– Hot desk
– Hourly desk
– Customized package
Other shared work-space providers to consider
Maxxelli’s Shanghai, Wuhan and Chengdu offices all operate from WeWork co-working spaces. Please get in touch if you have any questions or require any tips about bringing your business office into the co-working space (email@example.com).