This interview is a conversation with Alan Ai, WeWork’s General Manager for Greater China. It’s the first in a series of interviews with new USCBC member companies. WeWork, a company that provides services and office spaces to teams ranging from small groups to Fortune 500 companies, recently became a member of the US-China Business Council. Mr. Ai spoke with the China Business Review via email.
Can you talk a little bit about how WeWork first got started in China?
WeWork actually started doing research for the China market back in 2015, together with our local partners. WeWork CEO Adam Neumann said this April during Creator Awards Shanghai that “you cannot call yourself a global company without a good presence in China,” and China is very important market for us. On July 1, 2016, WeWork officially entered China with the opening of first location, WeWork Yanping Lu, which was 85% full on the first day of opening and 100% full within a month. In September we opened our second location in Greater China, which is located in Hong Kong Tower 535. Then we opened our China flagship WeWork Weihai Lu in November, announcing our first real estate strategic partnership with Sino Ocean Group, who now has 6 locations in operation with WeWork across Beijing, Shanghai, Chengdu and Shenzhen.
We’ve been expanding very fast in the China market. In the past 28 months, we added our presence to 59 locations in 6 cities (Shanghai, Beijing, Chengdu, Hong Kong, Hangzhou, and Shenzhen), with a membership of more than 30,000. Our first location in Wuhan and Guangzhou will be opening by the end of December or early January 2019.
What kind of social and cultural barriers or differences did WeWork have to adapt to or overcome when it started its China Operations?
Every market is unique, and China is no exception. Therefore, localization is always our first priority when entering a new market.
For the China market, I would say there are more commonalities than differences. For instance, we find that there is a macro shift in the way people work going on, towards more meaning and collaboration. This shift is not only in the US and Europe, it is also happening in China. Due to its big working population of millennials, this shift is even more obvious, which helps foster a promising market. Our community events, online connections, and “thank god it’s Monday” (TGIM) mentality are all welcomed by local creators.
There are some differences of course; for instance, we find that in China, bigger conference rooms are more welcome because Chinese people like having meetings and the importance of the meeting is indicated by the size of conference room – the bigger the room, more important the meeting.
We also changed our drip-coffee to fresh ground coffee, since our local members like the high-quality drinks. We use local beers, set up local communities, and have switched to local food. Seating arrangements in China are also different from the US; in China, people sit face to face, not back to back like in the US.
All these are tiny details in daily operation in China, but these are really good examples of how we react to local needs and respect their local culture and social habits. But again, localization is not changing our core – community. We are still building and running our locations with this core.
How do your spaces shape and change communication and collaboration styles?
Physical space is only one part of what we provide, we also provide services, hospitality, and more importantly, community. An interesting data point for your reference: in our global community, about 70% of our members interact with each other, online and offline, and about 50% of our members do business with each other.
Companies in traditional offices may lack opportunities to communicate and collaborate with each other. This is also the biggest barrier for corporate innovation. If you don’t even know each other, how you are going to work with each other for innovation? That is why we build a community where we connect people with each other by means of community events, designing common areas with pantries, using glass walls instead of concrete ones. We even build connecting staircases within our locations aiming to further connect people. When people walk up and down the staircases, it’s natural they will increase eye contact. Our corridors are also designed pretty narrow on purpose, so when you and your colleague walk in, it is very natural to say hello to each other. All of these are design details that we are working on to encourage internal communication and sharing.
So far, what I hear most from our members, especially those on enterprise members’ management teams, is all very positive. It’s easier for them to recruit, their employee retention rate is high, their business grows, and employees are more active in sharing and communicating with their own colleagues and external partners. We see positive impact on local creators and we are very happy about that.
What kinds of companies are using WeWork spaces in China? Are they tech companies? Startups? Chinese or foreign?
We serve companies of all sizes from all industries, from startups and freelancers to small businesses, multinational corporations, and Fortune 500 companies. The WeWork community is united by a desire for our members to create meaningful work and lead meaningful lives. In China, we have startups, SMEs (small and medium enterprises), enterprise, and also Fortune 500 companies, both local and international. These enterprise members make up more than 30% of total membership. The majority members of WeWork in China are Chinese.
What’s different between WeWork spaces and strategies in Beijing and in, say, Chengdu? And what’s different between Beijing and New York?
In Beijing, we have more enterprise members while in Chengdu, small- and medium- sized companies are the majority.
In terms of design, we actually add local elements to our spaces in different cities. For instance, in Beijing Guanghua Lu, we use the frame concept that is always seen in the traditional Chinese garden as a reference (see photo); while in Chengdu, we use panda, bamboo and Majiang elements.
Beijing is the capital city of China and it has attracted lots of international companies. Chengdu is a developing market in China, but it is developing very fast and seeking more connection with the international community.
We’ve been in New York for over 8 years but only 1.5 years in Beijing, so we are still very young here in China.
Can you talk about WeWork’s use of technology investment and data analysis in optimizing your operations in China?
Spaces need to be utilized more efficiently. And the people that use those spaces want an improved digital experience both with the building and the community within it. WeWork’s rapid growth is driven by our technology — the majority of which has been built in-house — that spans R&D, construction, real estate, and design, as well as community experiences.
WeWork now has over 600 technologists split between San Francisco, New York, Tel Aviv, and Shanghai who are focused on delivering beautiful spaces and a carefully curated community that positively impact employee productivity, creativity, and collaboration.
To support this rapid growth, we’re building technology to automate design, construction, and opening processes at scale. That means investing in design systems, inventory management, workflow and collaboration tools, robotics, and machine learning to automate as much as we can. The more we can automate, the more attractive our service is to enterprises who want on-time, beautiful, and cost-effective options for their space needs.
Our in-house R&D team regularly assesses how our space is used, including how frequently our phone booths are being used and for how long, how many seats are filled in a conference room, whether our members prefer conference rooms with whiteboards or ones with TV screens they can connect to.
We then incorporate this data into our design process to maximize efficiency — we can now predict meeting room usage before a new location is constructed — so if we need more conference rooms, or more of a different size, we’ll make that happen. If we need more phone booths, or larger common spaces, we take that into account as well.
Do you have partnership or cooperation with Baidu, Alibaba, and Tencent?
Yes, for example, we have been heavily involved in the partnership with Zhima Credit (Alipay) of Alibaba Group, and we are one of their first technical partners to be integrated in their Corporate Credit product.
Looking back on two years in China, what has been the company’s best decision in the China market?
As a global community of creators, WeWork has consistently been supporting local community development ever since the company entered the China market in July 2016.
By echoing and supporting creation and innovation in China’s communities, WeWork has launched and will continue to launch new initiatives to help foster the local creative community.