WeWork, naked Hub Push Co-Working into Alibaba’s Home Town

The trend toward cosy offices with beer on tap is spreading beyond China’s first-tier cities, with Shanghai-based flexible office brand naked Hub announcing a new centre in Alibaba’s home town of Hangzhou, and US giant WeWork eyeing expansion into select second-tier markets.

naked Hub will land in the Euro America Centre (EAC) in a high-tech development zone in the capital of eastern China’s Zhejiang province, as part of a new partnership with the property’s developer, the company announced this week. The two-year-old startup also plans to open two new locations in Shanghai and one in Beijing early next year.

Rival WeWork, the world’s largest co-working operator, is also eyeing expansion into the eastern China high tech hub. The New York-based company’s new general manager for Greater China, Alan Ai, told Mingtiandi that WeWork is considering locations in western China’s Chengdu, and the southern mega-cities of Guangzhou and Shenzhen in addition to Hangzhou.

naked Hub Heads to Hangzhou

naked Hub will set up its first Hangzhou venue in a 20-storey, 127,000 square metre mixed-use building that is also home to a Regus co-working centre. The property at 18 Jiao Gong Road is located in the Zhejiang Hangzhou Sci-Tech City in Xihu district, adjacent to prestigious Zhejiang University.

Under the strategic cooperation agreement with Zhejiang Jiangong Real Estate Development Group, the two companies will also work together to build co-working offices under a joint brand name in the Euro America Financial City (EFC), a large-scale complex the same developer is building in Hangzhou.

Naked Hub is betting on Hangzhou’s flourishing tech scene to generate demand for flexible workspaces. Mainland ecommerce giant Alibaba is based in the city and a thriving ecosystem of Jack Ma-inspired startups has made the city of nine million people an innovation centre.

“Hangzhou is one of China’s fastest-growing cities, and in partnership with Zhejiang Jiangong, we hope to provide the city’s talented workforce with a better working environment and new community connections,” commented Jonathan Seliger, CEO of naked Hub in a statement.

naked Hub has already opened nine locations in Shanghai and three in Beijing, with four more centres underway in each city. For the first quarter of next year, the company is planning to set up shop on Guangdong Lu and Jiujiang Lu in Shanghai, as well as Dawang Lu in Beijing.

The high-end co-working brand recently unveiled its second Hong Kong location in Sai Ying Pun.

WeWork Sees No Competitors in China

Manhattan-based WeWork is also poised to venture beyond China’s first-tier hubs, after establishing its first foothold in Asia by opening a Shanghai centre in July 2016. The $20 billion startup has raised $500 million for its China expansion from SoftBank Group and Hony Capital, as part of a $4.4 billion funding horde for its operations in Asia.

All that cash may help explain why the company appears relaxed about the challenge from homegrown rivals including naked Hub and Beijing-based unicorn UrWork. “We don’t position ourselves as a co-working space provider, so we don’t see any local player as our competitor,” commented WeWork executive Alan Ai in an exchange with Mingtiandi.

“Instead, we see the work itself as our direct competition. We have seen the shift in the way of work towards more collaboration and meaning. WeWork has been helping lead this new way of work,” added Ai, who joined the company as General Manager, WeWork Greater China in September after working as vice president of marketing for Shanghai Disney Resort.

Is Hangzhou Ready for the Hipster Invasion?

WeWork operates three centres in Beijing and five in Shanghai, as part of its global platform of 255 locations in 58 cities worldwide. Four more locations in the mainland cities are coming up “very soon in early 2018,” the company confirmed. One will land in the Sanlitun neighbourhood of Beijing, and the other three will be located in Shanghai (at Huashan Lu, Nanjing Xi Lu, and Pudong’s Shanghai IFC).

WeWork also operates two venues in Hong Kong and is reported to be planning a third at Quarry Bay. Building on its mainland base, Ai told Mingtiandi that the company plans to enter three to five new cities in China next year.

In looking beyond China’s top-tier coastal hubs, naked Hub and WeWork are following in the footsteps of mainland rivals including UrWork, which is planning a $150 million project in Kunming; commercial developer SOHO China, which announced that it would introduce its 3Q co-working centres to Hangzhou and Nanjing; and WEPLUS, which has offices in cities from Ningbo to Xi’an.