Office-share company ramps up expansion in Southeast Asia where it sees its future
U.S. co-working space provider WeWork is expanding its business into the Vietnam as it strives to build a presence in the region’s largest economies by year-end.
According to a report by CLIFF VENZON, a Nikkei staff writer, the company revealed on Wednesday announcement of its expansion in Ho Chi Minh City where its first site will be in the E-Town building, near the city’s commercial center. The location will be one of WeWork’s largest in Southeast Asia, with room for more than 1,000 members, said Regional Managing Director Turochas Fuad.
The site, which will open in December, add to the existing offices in Jakarta and Singapore. WeWork expanded to Southeast Asia last year and its network now spans 12 locations with more than 6,000 members.
“The plan is to launch six markets by end of the year,” Fuad said, adding that expansion in Malaysia and Thailand is underway.
WeWork, which has allocated $500 million for its expansion in Southeast Asia and South Korea, will open more locations in Hanoi and other cities in Vietnam within the next year to meet increasing demand for co-working services.
WeWork is banking on the millennial work culture of mobility, the region’s growing number of startups, small- and medium-sized enterprises and multinational companies that require flexibility in choosing offices.
“This (Southeast Asia) is where the longer-term investments are going to be,” Fuad said.
Vietnam’s government has launched in the past few years a number of programs and incentives to support local startup communities and a growing information technology sector, as well as to open more markets to foreign investment. Vietnamese are encouraged to move to the cities to form entrepreneurial communities and establish international connections.
Related topic: Company formation services in Vietnam
Vietnam is the region’s fastest growing economies and enjoy booming foreign direct investments.
According to a 2017 study by CBRE Research Vietnam, more than 90% of co-working space users in the country are under 35, compared with the global figure of 67%. And 54% of users are founders or employees of startups, while approximately 14% are freelancers and self-employed. These numbers reflect Vietnam’s young demographics and new working styles.
The sharing economy has gained popularity in Vietnam, which ranks highly worldwide in terms of internet access and consumer electronics exports. Growth in online services also stimulates related businesses in the creative and high-tech sectors.
“Our services will minimize the cost of running a working location for businesses and connect members to the world via our ecosystem,” said Fuad.
Vietnam’s co-working spaces have increased at an annual 55% rate over the past five years, with the total area expected to reach 90,000 sq. meters by the end of 2018. There will be 45 locations in Hanoi and Ho Chi Minh City, up from just 19 this April, run by dozens of local operators.
Toong leads the market with a 42% share, followed by Up and Circo at 13% each, and Dreamplex with 11%, according to the latest survey by CBRE Research Vietnam.
In April, WeWork spent $400 million to acquire Naked Hub, a China-based co-working space operator that also has locations in Vietnam. Hang Nguyen, WeWork’s community director in Vietnam, told the Nikkei Asian Review the company will incorporate Naked Hub’s facilities and open new ones, seizing the best locations as quickly as possible. WeWork adds eight to 10 locations to its network each month in major cities around the world.
Read full article on Nikkei.com