The listing of Youke workshop is the beginning of the death of this industry


Source: AI financial news agency
Written by Li Ju
Editor / Dong Yuqing
On the day of the listing of Youke workshop, Xu Xiaoping, founder of Zhenge fund, personally shot a personal solo video of nearly three minutes to express his ecstasy. In the video, he sometimes dances, sometimes his feet bounce off the ground, happy like a three-year-old.
In this festive day, Xu Xiaoping does not forget to talk about the story of the early pioneering work in Daqing, “I said Daqing, let’s start a business. I mean, I mean, for fun. There are risks in starting a business, so Daqing needs to be cautious. But Daqing is serious! Youke workshop is born. ”
The earliest story can be traced back to the evening of February 14, 2015. Mao Daqing and several old friends of fund companies came to Xu Xiaoping’s home. More than 20 days later, a shocking news came from the real estate circle: Mao Daqing resolutely resigned from the post of chief executive officer of Vanke in Beijing and devoted himself to starting a business. Since then, in a small office in Sihui, Beijing, Mao Daqing started his entrepreneurial journey.
In just a few years, the value of Youke workshop has risen from a start-up to $3 billion. Now, in the context of capital recession, the market value has dropped to only $480 million. Mao Daqing may have realized this for a while.
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The future of Youke workshop has not become bright with the curve listing. After landing in the capital market, the stock price of Youke factory broke and began to go down all the way. According to the prospectus, the total loss in the past three years has exceeded 1.4 billion yuan. Mao Daqing also said frankly that this year is the most difficult time in the five years since the birth of Youke workshop.
Youke workshop is not an exception. On the track of joint office, a large number of enterprises have collapsed. Two years ago, the price war, blind housing market and other disorderly competition, so that the joint office market is burning. However, after the tuyere, only a mess is left.
After the capital ebb in 2018, where should the joint office enterprises go after two years of silence? This has been left to the joint office industry as a whole.
The death of shared office
If it wasn’t for the news about the launch of Youke workshop, people would almost forget the once popular shared office space. In the huge office space decorated with foreign style, there are companies from all walks of life. Every lunch break, workers from different cubicles will rush into the public area, have a cup of free coffee and have a rest on the comfortable sofa.
It’s no longer true that you’re once again in a joint office. Not only is there no free tea and drinks, many office areas are empty, and even face the dilemma of being driven away by the landlord.
Zhang Hao, who rents his job in a joint office space called RichBox in Shanghai, is worried about it. Zhang Hao is a Taobao shopkeeper who makes Lolita clothes. At the end of November this year, he suddenly received a notice from the property company to move. As the joint office enterprise failed to pay the rent as scheduled, the property management company decided to withdraw the existing merchants.
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In fact, this is Zhang Hao’s second move to the studio this year. “In the first half of this year, due to the epidemic situation, the rented office was empty for nearly six months, and more than 100000 yuan was lost. When there was no money, it was replaced by a joint office, and now we have to move.”
With the explosion of long-term apartments, negative news such as the protection of the rights of tenants emerge in endlessly. Zhang Hao once thought that he might also become a member of the rights protection. Fortunately, the negotiation process with the property company was relatively smooth. He received due compensation as agreed. The only thorny problem was where he should move next.
Recall that five years ago, with the tide of entrepreneurship and the concept of sharing economy, joint office enterprises attracted countless entrepreneurs. It focuses on sharing economy and attracts a large number of tenants with the advantages of flexible leasing, high-end decoration and low price.
The three years from 2015 to 2018 are the craziest period in the joint office market. According to the “2016 innovation and entrepreneurship white paper” issued by Tencent Research Institute, the number of domestic maker spaces has rapidly increased from more than 50 to more than 2300 in 2015, an increase of nearly 46 times. However, by the end of 2018, affected by the economic environment, the domestic investment boom has ebbed, and the unprofitable joint office industry has entered the shuffling stage, and the market heat is rapidly cooling down.
Since 2019, most joint office enterprises have been in a tight financial position. Including Nash space, krypton space, a number of joint office head enterprises have burst out layoffs, wages and other news. In fact, since Wework, the ancestor of overseas shared office, fell on the eve of IPO, capital has lost its confidence in the shared office track. “After the failure of Wework, basically no domestic company has received financing.” A senior person in the industry said.
In March of this year, Shenzhen United Office Enterprise “maker post station” was unilaterally terminated by the owner due to three months’ Arrears of rent of nearly 6 million yuan. Soon after, news came that the Shanghai headquarters of funwork was going through the bankruptcy process and that the Hangzhou project would be closed on April 9. Even Pan Shiyi, who had announced that he would split SOHO 3q and go public independently, had to start looking for new buyers for SOHO 3Q.
So far, the upsurge of joint office in 2015 seems to be coming to an end.
Reshuffle, mergers and acquisitions, shop closures, layoffs, etc., all joint office enterprises fell into the altar. “According to the monitoring data on our platform, the highest rental rate, that is, in 2018, can reach 97.07% of the whole year. At the beginning of 2019, the rental rate is also around 92%. During the epidemic period, the rental rate dropped to less than 82% Chuang Fu Gang group vice president Tang Wei said. If not for the impact of the epidemic, Chuangfu port had planned to expand 27 projects this year, but only 19 projects have been expanded so far this year.
From the data of the whole joint office industry, according to the analysis report on the epidemic situation response and appeal of China’s office industry in 2020, 52.38% of the joint office brands stopped business because of the decrease of customers.
Start up a company and lose it

Due to being criticized as “two landlord” mode, shared office has been used to compare with long-term rental apartment. In the past two years, however, a large number of businesses have not yet collapsed in the past two years. At present, according to the AI financial news agency, many tenants who have to move due to the removal of rent by joint office enterprises have also received normal rent deposit compensation.
A senior person in the industry disclosed that this may be related to the different financial models of the two. At present, the joint office enterprises do not involve in the financial leverage mode similar to rent loan. “Joint office also considered interbank lending in the early days. But later it was found that the handling of loans was particularly troublesome. Because the long-term rental apartment is a to C business, the bank will be willing to form a loan relationship with individual customers. But for the to B work done by joint office, it is impossible for any individual to be willing to form a loan relationship in the name of the company. ”
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However, the large-scale bankruptcy tide is difficult to cover up the internal problems of the joint office industry. Some people attribute it to the failure to reach 80% of the rental standard line, while others believe that its to VC mode has directly cut off the capital source of the industry after Wework’s listing is blocked.
“Even if there are two problems in the company and the office, there will be no problems in the business model of the company.” The industry said.
Thanks to the flexible rental demand, the proportion of newly-established customers is obviously higher when the domestic shared office space starts. Joint office has successfully attracted many start-ups by turning the whole rent into the rent form of scattered rent, helping them solve the high rent cost in the early stage.
According to this industry person, “during the period from 2015 to 2017, the number of domestic start-ups
The quantity is very large, this kind of miniaturization company, to the joint office rents the demand in the form of working station is very high. In addition, it also undertakes some new business leasing requirements of large enterprises, such as project team or department team, and takes joint office as a flexible office channel. All these factors make joint office a kind of rigid demand. ”
But it is this flexibility that makes the operation of joint office enterprises more difficult, especially in how to retain users, which tests the cost and operation strength. “In fact, the survival rate of early joint office customers is very low. Even if they sign a one-year lease term, the enterprise will die within a long time. No one can have time to screen this customer. Everyone can sign one customer, but in fact, many of them are unsustainable. ”
Even holding the banner of the sharing economy, joint office inevitably adopts the traditional thinking of investment promotion. It brings customers through the third-party channel, that is, the intermediary agency. The investment promotion of intermediary agencies has become an inseparable link of joint office, but this is exactly the main reason why joint office is under the pressure of investment promotion.
Enterprises often need to pay 15% commission to intermediary companies if they want to find merchants in the market. However, due to the high flexibility of the joint office market, the cost of obtaining customers is greatly increased.
“Most of the customers only sign for half a year or a year, and many of them break the contract halfway. As a result, the Commission of the joint office enterprise, that is, the marketing cost, is no less than 15% a year. After that, in order to obtain customers continuously, the cost has to be added. The traditional second landlord usually has a longer contract time, and only needs to pay 15% of one year’s rent for three years. ” Zhang Cheng, a senior practitioner, said.
Zhang Cheng even believes that the early joint office pricing has its original sin. “The earliest industry pricing was decided by the industry practitioners. Everyone did not know how to set the price. Generally, it was based on the rules of the traditional office industry. But it involves more problems than traditional office buildings. ”
“For example, the commission that office buildings give to intermediary companies is 15%. In traditional office buildings, the intermediary has to do a lot of work, such as decoration, site selection, planning and so on. However, the professionalism of intermediary in joint office is very limited. Decoration and site selection are all ready-made, which can not give much effect, so this high commission is virtual high. “.
On the merchant side, the shared office atmosphere created by Wework is difficult to integrate with the domestic office market. “Americans have a strong social culture and a high proportion of self-employed people. However, the overall situation in China is that small-scale private enterprises have gone bankrupt very badly. Once the team exceeds seven or eight people, they all want to have a relatively independent office. ”
So, is it a new way out for joint office to embrace large and medium-sized companies under the unstable source of customers of start-ups? The reality may be more brutal. In fact, when an enterprise has more than four employees, the low price of the joint office enterprise will lose its advantage. “In the first tier cities, a single station of a joint office enterprise costs about 1500 yuan a month, which is of course cheap. But as long as there are more than four people, it means that the cost of a job is as high as 6000 yuan, while renting a traditional office at the same price can rent a larger area.”
Here comes the real estate agent
On the issue of how to get rid of the criticism of the “second landlord”, the United Office enterprises have been struggling for many years, but they have not been successful.
To some extent, joint office has been hoping to get rid of the simple mode of earning rent difference. In addition to the traditional office space, many joint office enterprises have also launched value-added services such as daily property management, investment and financing matching, incubation acceleration, and outsourcing of industrial and commercial tax law. The latter is often regarded as the life-saving straw of transformation by joint office enterprises.
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For example, the Youke workshop, which is aware of the unsustainability of the second landlord mode, puts forward a new development focus, that is, it does not provide office space, only exports brand, design, management and consulting services to owners, and collects market and brand service fees.
Since 2019, Youke workshop has increased the proportion of asset light business. In the first nine months of 2019, among the 874 million yuan revenue of Youke workshop, the income of the second landlord mode is 419 million yuan, accounting for 48%; the income of light asset mode is 403 million yuan, accounting for 46%. The former accounted for 88% in 2018 and 92% in 2017.

But for the Youke workshop, which is always in a loss state, the asset light model is not favored by most people in the industry. Industry insiders engaged in joint office enterprises said, “we think that asset light may not have a future, because this is a paradox. Asset light is to pull in the second party, so as to achieve the effect of 1 plus 1 greater than 2. However, if one party’s own profits have not been solved, light assets can not achieve a win-win situation.”
In addition to the exploration of light assets, many joint office enterprises focus on the value-added income of enterprises, such as exploring community operation or intelligent technology services. But in the state of feeling the stone to cross the river, no enterprise can really break through the barrier successfully.
The key problem is that customers can’t pay the bill. A joint office employee said, “the core problem of these additional businesses is whether it’s intelligent or community. Once you do this, it means that someone will pay for your invisible added value. But now the customers obviously can’t share it, then the added value business will not exist.”
However, in the joint office enterprise shuffle, the other side of the giant real estate companies began to enter the market layout. AI financial news agency learned that many leading real estate developers are quietly launching the joint office brand, Vanke has launched “niuhr”, Jinmao capital has launched the office space brand J space, Henderson has launched the office brand bcos, etc.
The common feature of these projects is that they mainly focus on the high-end market. Although they are still joint office mode, these companies basically no longer publicize the concept of joint office, nor mention third-party services.
Different from entrepreneurial joint office players, real estate companies mostly use their own properties to test water and share office, which is also the biggest advantage of real estate developers.
Among the many joint office players, Zhang Cheng is the most optimistic about the prospect of joint office of real estate companies. “The self-sustaining property of real estate companies is equivalent to revolutionary cost reduction. Basically, there is no pressure of rent. This is a huge advantage that entrepreneurial joint office enterprises can’t compete with. On the other hand, the real estate company is positioning high-end market, which means that his customer group is relatively high-quality and has a stable source of customers to support. ”
However, in Tang Wei’s view, capital advantage can not be the key to win or lose the game. “Based on business differences, real estate enterprises are unlikely to really do meticulous management. However, the joint office market is a very test field of operation ability, which requires professional teams and operators to continuously deepen their cultivation. There is a logical difference between it and real estate enterprises.”
By the middle of the game in the joint office market, most of the early players had died, and the market demand that had been emptied was being reaped again by the giants. After experiencing the ups and downs of joint office, Zhang Cheng looked back at the changes in the market today, which has been quite indifferent. “It’s no pity. As long as the company does not produce actual economic benefits, it will be eliminated by the market, sooner or later.”
(at the request of the interviewee, Zhang Cheng changed his pseudonym)