Caption: WeWork’s co-working space in Shanghai, China. The company is planning a big expansion in the nation, where co-working is getting increasingly popular with the younger generation. (Photo credit: WeWork)
From bikes to working space, the booming sharing economy is China has become one of the latest battlegrounds for startups fueled with investments.
New York-based co-working space startup WeWork recently launched in China its space custom service targeting big corporations with more than 1,000 employees, which the company said made up about a quarter of its new Chinese clients from March to August.
The move follows its launch of a dedicated China business unit in July with $500 million funding from investors including China’s Hony Capital and Japan’s SoftBank as it competes in a market where local players like UrWork is also expanding aggressively. The company was valued at $20 billion in the latest funding round in July.
While WeWork is heading east, its Chinese rival UrWork is looking west. The largest co-working company in China, UrWork is backed by Alibaba affiliate Ant Fiancial and is known as China’s first unicorn startup valued at more than $1 billion. It just opened its first locations in Los Angeles and Singapore. It is now working with New York-based Serendipity Labs Coworking on a co-branded 34,000 square foot location at 28 Liberty Street, which is slated to open in January.
The two companies confronted each other last month when WeWork sued UrWork and its US partner Serendipity Labs for trademark infringement, which the judge ruled that UrWork will not be able to use its name outside of China though UrWork responded denying infringing the trademark of WeWork.
As coworking space is evolving, consolidation is going to intensify in Asia Pacific as the space becomes more crowded, said Susan Sutherland, head of Corporate Solutions Research at JLL Asia Pacific, a real estate and investment management firm.
“It’s really about understanding what will drive demand, both individual and corporate, to their spaces in an increasingly crowded marketplace.
Understanding the local nuances is important,” she said.
WeWork now runs with a local playbook with a local team, said Alan Ai, WeWork Greater China general manager.
“We bring best products and services into China market adding in local elements like design, operation, etc. to meet local member requirements,” he said in a statement.
WeWork’s clients include both local startups like biking sharing company Ofo and international corporations like HSBC, lululemon and Boston Consulting Group, as the idea of space sharing becomes increasingly popular among the younger generations.
Founded in New York, the company now has more than 150,000 members in total with more than 170 locations in 18 countries. Since its entry into China in July last, the company has accumulated some 10,000 members with 9 locations in Beijing, Shanghai and Hong Kong.