3 reasons why coworking is booming in China and what’s next?

Naked Hub in Fuxing Lu, Shanghai. (image courtesy of http://www.nakedhub.com/en/hub/fuxing-lu)

According to real estate services firm Jones Lang Lasalle, by the end of 2016 there were over 500 coworking sites in Shanghai and Beijing alone, compared to just a few in the end of 2015. As the sharing economy takes root in China with increasing vigour, a growing number of Chinese customers are shifting to a collaborative consumption lifestyle, resulting in a huge boom of co-working spaces in recent years with thousands of operators emerging. Generally speaking this is a mindset change: from owning something to renting something. Since this ‘new’ mindset is not totally a new thing in China, coming from a collectivist economy, it’s easy to imagine how fast these ideas of sharing economy are being embraced in China.

Naked Hub in Fuxing Lu, Shanghai. (image courtesy of http://www.nakedhub.com/en/hub/fuxing-lu)

Naked Hub in Fuxing Lu, Shanghai. (image courtesy of http://www.nakedhub.com/en/hub/fuxing-lu)

1- China’s change follows the global trend

Shrinking office space is now common in the professional world. The average for all companies for square feet per worker in 2017 is projected to be under 14 sqm, compared to 16.4 sqm in 2012, and 20.9 sqm in 2010, according to CoreNet Global. And since those reports were released, the trend has steadily continued upwards.

WeWork’s incredible growth, proves just how popular shared and flexible office spaces have become. Especially in China, as growing companies compete in rapidly changing markets, leases have been getting shorter and shorter for years: young businesses that need to be nimble in order to succeed, don’t want to be stuck in a years-long lease if their  hope is to scale up and move elsewhere. On the other hand, even some Fortune 500’s have opted to move some of their employees into coworking offices, to expose them to innovation especially for beta-phase business units.

Wework Weihai Lu, Shanghai.Wework Weihai Lu, Shanghai.

2- Rice farming led to collectivist thinking in China

For centuries, the cooperation required to plant, tend and harvest rice grown paddy-style made those born in southern China think more communally, especially if compared to those born in northern China, where the primary crop was easier-to-farm wheat. Rice farmers form cooperative labor exchanges, and the irrigation systems create commons dilemmas that villagers have to solve—things like dredging the common canals and coordinating common flooding times. According to a study, ancient farming practices may shape the thinking of modern descendants living in a sprawling, crowded city.

Brown rice terraces view in Southern China

Brown rice terraces view in Southern China

3- Many Chinese started their life in a forced-to-share environment

During China’s more hardcore collectivist years from the 50s up until early 90s, housing was centrally planned, and families were usually assigned to live in tube-shaped apartments, that can still be seen around China. The so-called tube-shaped apartment building (or 筒子楼 Tongzilou) is a building with a corridor running through the main structure with rooms on both sides of it. Usually there are over ten families living on one floor and each family lives in one room. Some rooms are used as kitchen shared by three or four families and the toilet is also shared. This kind of building with long corridor, bathroom and toilet are all public houses. Numerous Chinese people started their family life in the tube-shaped apartment buildings. Famously, the movie In the heat of the sun 阳光灿烂的日子 shows the life of Beijing youths who grew up in these kind of buildings (here are some photos from tube-shaped apartments and here is a very extensive research on the lifestyle in these tube-shaped apartments).

After the economic reform, But due to imbalanced development between regions in China, an irreversible trend of large populations crowding into major cities under high- speed urbanisation made the housing problem caused by the unprecedented residential demand obvious and prominent, expanding the shared living phenomenon. Qunzu 群租 (group-oriented leasing) became such a common thing in first tier cities (where ordinary housing is almost unaffordable), that the word became one of the 171 neologisms released by the Ministry of Education of China in 2007. Qunzu is identified by a large number of tenants living together with a low rental price, and it happens in residential building that were’t planned to be shared. In this situation, the larger room is always divided into several separate rooms by gypsum board partitions, and each has simple decoration and is equipped with basic furniture, similar to student dormitories in Chinese colleges, equipped with bunk beds to accommodate more people. Qunzu conglomerates of self-built housing turned into slums, also called urban villages 城农村.

Tube-shaped apartments in Shanghai Putuo

Tube-shaped apartments in Shanghai Putuo

How coworking spaces are evolving

Around the coworking nucleus, coworking spaces will have a retail coffee shop, tap room, and café. And later will evolve to include a health club, spa, residences, dry cleaning, and even more retail options so members get an immersive experience and the management won’t be totally dependent on membership dues to pay expenses. Members could potentially live, work, and socialise without commute times, weather hassles, or expensive taxis.

To give workers an edge over a home office, the coffee shop, or even a corporate office, many of the smaller independent coworking spaces have already begun creating online and offline communities, having people to reach out and use co-working and co-working environment not just when they are in the physical space, but also online.

 The Collective, an innovative building concept that offers a next-generation co-living environment. (image courtesy of http://popupcity.net/co-living-a-new-metropolitan-way-of-life/)

The Collective, an innovative building concept that offers a next-generation co-living environment. (image courtesy of http://popupcity.net/co-living-a-new-metropolitan-way-of-life/)

Is a new concept of coliving the next big thing in China?

The sharing economy has normalised sharing our cars with strangers through Uber, our homes with tourists through Airbnb, our workspaces through co-working office spaces through companies like WeWork, and now, our everyday lives, thanks to new “co-living” concepts.

College education in China makes interprovincial movement much easier for young people, making them an essential part of work- and house-hunting groups in cities. Many social changes such as the declining affordability of home ownership as well as delayed marriage and childbearing make house sharing a popular residential choice for young people. From baby boomers to millennials, people are increasingly looking for compact, mixed-use communities with reliable, convenient transit systems.

Student-style accommodation with communal facilities could help solve the housing crisis and regenerate urban centres around the country. I expect the raise of something between student accommodation and a hotel. A space that could offer tenants serviced rooms in shared apartments with communal lounges, kitchens and bathrooms. Something designed to be safe and at an affordable price, but for rent rather than purchase. Young people today interpret their quality of life differently to a generation before. They want to live in the middle of the action, seek a more sociable lifestyle, close to cultural life and amenities. And they’re happier actually living in a smaller unit to do that. They are not as absorbed by the need to own property. Didi Chuxing, Mobike and rental car services like the upcoming LYNK & CO, but even subscription based video services are all good examples of how Generation Y is choosing to do away with belongings. They are all about experiences and there’s a future for work and living spaces to catch up with this whole co-movement.