There are two trends in co-working space sectors in China.
On the one hand, foreign co-working spaces such as WeWork are seeking opportunities to enter China. On the other hand, Chinese co-working spaces are looking for chances to expand abroad.
With its headquarters located in Sanlitun Soho, the heart of Beijing’s international business area, DayDayUp (DDU) is a co-working space that has been up and running for one year, but it has already opened two other spaces.
One is in Zhongguancun, nicknamed “Beijing’s Silicon Valley”. With its eyes on world expansion, DayDayUp opened a branch in San Francisco in early November. It is planning to do the same in Southeast Asia and Europe.
“When you open up a space (in an overseas market), it’s not only about the space. It’s about the team and community that you build there,” said Jerome Scola, DDU’s co-founder.
He said that opening branches is essential for them.
“If you want to help a company to expand to Brazil, you have to be in Brazil, because you have to follow the startups and have your own networks there,” said he.
Still, there’s Wework, the world’s top valuated co-working space, for one to look up to. WeWork raised USD 430 million in March and was valued at USD 16 billion, according to Bloomberg.
Earlier this year, WeWork entered China when it opened a space in downtown Shanghai. As of today, WeWork has three spaces across China.
But DDU is different. Scola said that they are more like China’s Plug and Play, or Rocket Space.
“In the USA, the co-working business started quite a long time ago, but a lot of noise began to emerge since two or three years ago, when WeWork started to grab a lot of funding. What WeWork succeeded to do is to grow a big brand,” he said.
He said that the reason co-working became popular in America is because the price to rent and to build an office has become very expensive, and it’s challenge for startup to find office.
In China, the co-working scene is quite different, he said, as co-working space providers put the price very low.
“You can find a co-working space for a quite low price, sometimes even for free,” he said.
As many as 4875 co-working spaces and incubators had been set up around the country by the end of 2015, according to official data.
The boom is partly fueled by a government subsidy. A state-level incubator was able to receive RMB three million (USD 438,000), according to local news portal Sina. As a consequence, some incubators make profits by receiving subsidies and charging startups, and fail to provide concrete help to the startup scene.
Their strength, he said, is that they focus on the innovation side, and try “to connect members within its space, but also make connections from outside its space”.
DDU holds two to three events per week with leading internet companies, including Tencent, KikaTech and Angry Birds. Scola and Yiqun Bo, DDU’s founder and CEO, were former executives of of the Great Wall Club (GWC) and are well connected with the Technology, Media, and Telecom (TMT) industries in China.
In the co-working space sector, some players are more real estate focused, and some are more about networking, depending on the founders’ backgrounds. For its own part, DDU aims to bring some freshness with its own networking efforts.
(Top photo from DDU)