Caixin
May 30, 2018 11:22 AM
DOING BUSINESS IN CHINA

AmCham Beijing Finds New Home, Office in China’s Shared Economy

The recent rise of shared office specialists like WeWork has been well-chronicled in both China and the West, feeding off a new generation of small, entrepreneurial shops that like the flexible, social and affordable options such operators provide. But I was somewhat surprised to recently learn that the more button-down American Chamber of Commerce in China had made the unusual decision to try out the shared office concept by relocating to one such space in Beijing at the start of this year.

I briefly mentioned the shared office concept in a column about a year ago, when I remarked how far China’s office scene has come over the last three decades. The country’s rapid embrace of the concept since then shows how the country really has entered the global mainstream in this regard, at least in big cities like Beijing and Shanghai. The fact that such spaces can now lure the likes of AmCham also speaks volumes to China’s movement from an office dinosaur to a more cutting-edge position in helping to shape the office landscape of the future.

For those unfamiliar with the concept, this new generation of offices is an extension of the shared economy concept pioneered by the likes of ride specialist Uber and hotel alternative provider Airbnb. Such operators typically take big blocks of office space, or sometimes convert entire buildings, to create flexible spaces offering everything from hot desks for the occasional user to more permanent spaces for small teams of workers. They also offer common facilities such as big, open coffee bars for informal meetings, as well as gyms and conference rooms.

The rapidly emerging global leader in the space is U.S.-based WeWork, which made headlines last month when it said it would acquire the locally based Naked Hub, which was founded in Shanghai by expats. That move came two years after WeWork raised $700 million from two Chinese groups, including hotel operator Jin Jiang. WeWork’s Naked Hub deal would make it top dog in the emerging space, combining its own 20 locations in Beijing, Shanghai and Hong Kong with Naked Hub’s own 23 in Shanghai and Beijing. WeWork previously said it also planned to move into Shenzhen and Guangzhou, as well as the second-tier city of Chengdu later this year.

Confluence of change

AmCham China, which shouldn’t be confused with the separately run AmCham Shanghai, was at the confluence of the Naked Hub-WeWork merger, having moved into its current Beijing home in a Naked Hub location in January before the marriage was announced. That office happens to be just down the street from Caixin’s own headquarters in Beijing’s trendy Sanlitun district, making it quite easy for me to make the five-minute walk down the street to visit AmCham President Alan Beebe to discuss his unusual relocation decision.

AmCham isn’t exactly a Dow Chemical, Coca Cola or Disney, though it does count all three companies among its members. But the organization does have about 50 employees in its Beijing office, a bit larger than the norm for shared office users. It also tends to regularly network with the types of government officials and big corporate executives who might feel just slightly awkward at Naked Hub’s comfy but decidedly young and trendy coffee bar, where many casual meetings take place.

The organization was previously located in Beijing’s more button-down Central Business District (CBD), and decided to make the move to nearby Sanlitun after the lease expired on its previous home of the last seven or eight years. One of the biggest factors behind the decision, Beebe explained, was the changing demographics of employees at AmCham’s member companies.

That demographic has been skewing increasingly toward younger Chinese professionals, with about half of the workers at its member companies now Chinese passport holders. That’s a big shift from just a decade or two ago, when big multinationals employed far more expats. Such younger, local professionals are quite smitten with the modern coffee bar concept, not to mention the trendier image that Sanlitun enjoys over the stodgier CBD. The location was also attractive for the kinds of younger people AmCham itself tends to employ.

Naked Hub made the decision easier by working closely with AmCham to create a space that could meet its particular needs. It gave AmCham and one other bigger corporate tenant their own separate entrance at the building, allowing visitors to feel like they were going to a separate, more traditional office. But that same space has a convenient backdoor that goes into the main Naked Hub area, including the more typical crowded glassed-in spaces and coffee bar, gym and other shared facilities.

Beebe said rent for the Naked Hub space was roughly comparable to what AmCham previously paid, though the organization’s own exclusive floor area shrank by about a third with the move. In exchange for that tradeoff, AmCham got access to the common facilities, including large meeting rooms that often sat idle when it had its own such space at the previous office. The organization can also add or subtract space for workers as needed, albeit not always contiguous with its main office.

The connection could also offer some cross-marketing opportunities, with AmCham hoping to attract some Naked Hub tenants as new members and also promote space in the building to existing ones.

When I asked about adjustments, Beebe said an unexpected one was the loss of the “four walls” concept, which meant that employees tended to flow more freely between AmCham’s own dedicated office and the common spaces. “I don’t have the same sense of understanding of where everyone is,” he observed. “The mind shift for me is to focus on outputs, not inputs.”

At the end of the day, the shared office is clearly not for everyone, and is obviously best suited for the many young entrepreneurs that seem to multiply exponentially each year here in China. But it seems to be adapting to accommodate groups as big as AmCham, and China certainly seems to be at the forefront of that movement as it embraces the shared economy concept in its many shapes and forms.

Doug Young has lived in Greater China for two decades, including a 10-year stint at Reuters, where he led China corporate news coverage. Send your questions or comments to DougYoung@caixin.com

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