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!”

Bloomberg Businessweek (North America) - - Contents -

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.

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