The sharing economy takes off among Chinese millennials
Housing ▶ Co-living and co-working spaces are cropping up in big cities ▶ “Not a conformer to existing rules? We want you!”
Two decades ago, Tyler Xiong’s parents—like many Chinese—were required to live in a commune, run by the state- owned enterprise they worked for. Today, Xiong, 28, is one of 500 people residing—willingly—in a co-living space called You+ near China’s Silicon Valley, in the northern part of Beijing. For budding entrepreneurs, You+ provides shared facilities that include basic bedrooms and bathrooms, offices and workspaces, and amenities such as gyms and bars. Rents start at about $300 a month for a shared bedroom and bath. Over the past three years, almost 5,000 people across the country have moved into You+ communities, concentrated in Beijing, Shanghai, and the southeast coastal city of Guangzhou.
“Instead of working for years at a company to gain some capital, such a place allows young people to experiment with their startup ideas at very low costs,” says Su Di, the 36-year- old You+ co-founder who lives with his wife in the same Beijing building as Xiong. The converted school houses about 60 startups, including mobile game developers and video production companies. The You+ name is Su’s attempt to inspire the residents to look beyond their own ideas and ambitions. “There’s an element of brainpower sharing when people bounce ideas off of each other in a space like this,” says Xiong.
Because many young Chinese have
been priced out of big cities, Su’s project helps them stay close to where their businesses will have a better chance of success. The first You+ location opened in 2012 in Guangzhou. “The coast is very different from the rest of the country,” says Tyler Cowen, an economics professor at George Mason University. “It has much better jobs, and that difference is only going to grow as China slows down. People are going to do all kinds of things to adjust, so that’s where the sharing will happen.”
Lei Jun, the founder of smartphone giant Xiaomi and China’s seventhrichest man, was the lead investor in a 100 million-yuan ($15.6 million) round of fundraising for You+. Having struggled to start his company, Lei wanted to help young entrepreneurs. Su says there will be almost 20 You+ locations up and running by early 2016, from 12 currently.
In a recent survey, Nielsen found that 94 percent of Chinese are open to the concept of a sharing economy, compared with 43 percent of North Americans. That acceptance has given rise to businesses such as Didi Taxi. Co-founded by former Alibaba employee Cheng Wei, it’s Uber’s largest local competitor and valued at about $16.5 billion. Tujia, a Chinese version of Airbnb, joined the $1 billion club in August. Sharing services for apparel, sports equipment, even pets, are popping up across the country. According to a report from PWC, the global sharing economy will amount to $35 billion by 2025, up from $15 billion today.
Xiong owns two pairs of shoes and fewer than 10 outfits. He has no car and relies on Didi Taxi to get around. His attitude and that of many of his peers: Why buy when you can rent?
After working as a manager at gum maker Wrigley in Shanghai for two years, Xiong moved to Spain in 2013 to study economics. He returned to China last year and joined a bitcoin mining startup in Beijing that has generated about $3 million of the currency. At You+, he shares a bedroom with three others. He sleeps on a single mattress laid on the concrete floor under a loft bed. Xiong says he prefers to plow his earnings back into the startup rather than spend the money on himself.
Married couples are welcome at You+, as are pets, but kids aren’t allowed because the lifestyle isn’t deemed conducive to raising a family. People over 45 are discouraged, but it’s not a hard-and-fast rule. Wealth isn’t a factor—the founder of a popular restaurant chain lives in Xiong’s building.
A bulletin board near the entrance is covered in pink and yellow Post-it notes from residents hoping to trade services—a back rub in exchange for a dog walk, for instance. “Seeking idealistic coder with passion to change our world,” says one note. “Not a conformer to existing rules?” another says. “We want you!”
On the door of the common kitchen at the Beijing location is a notice with a QR code inviting residents to join a house committee via the messaging app Wechat. They discuss rules, shared costs, and how to divvy up cleaning duties. Sometimes conflicts arise. Noisy roommates are a common complaint, according to Su.
Xiong says what makes You+ different from the communes of his parents’ generation is respect for private property and the way technology enables residents to share. “I am a person of my times,” he says. “But this is also my choice.” �Bloomberg News
The bottom line China’s sharing economy is growing quickly, as more young people spurn private ownership.