‘WeWork for events’ start-up eyes expansion from Shanghai to Beijing despite economic headwinds in China
- Shanghai-based White Space, which offers venues for events and meetings on demand, is looking to add more locations, American co-founder says
- The firm hopes to attract businesses downsizing their real estate footprint amid a slowing economy
A meeting-space start-up in China, co-founded by an American entrepreneur in 2018 and which tripled in scale during the Covid-19 pandemic, is looking to expand across major Chinese cities despite the country’s growing economic woes and worsening relations with the US.
Shanghai-based White Space, which offers venues for events and meetings on demand, has grown from four locations in 2019 to 12 since the beginning of this year. It is now looking to add at least one location each quarter in tier-one cities including Beijing, Shenzhen and Hangzhou, co-founder and CEO Barbara Ex told the Post in a recent interview.
While co-working space providers such as WeWork give users flexible access to work desks and private offices, White Space focuses on larger rooms that can host between 10 and 150 people for training, sales meetings and team building activities.
The firm is hoping to attract businesses planning to reduce their real estate footprint and therefore need budget-friendly external space for collaborative events, said Ex, a consulting veteran who has been working in China since 2005, including a one-year stint as an executive at computer giant Lenovo in Beijing.
“The economic slowdown actually supports our model because people are looking for ways to economise where they can,” Ex said. “They still want to meet, but maybe they don’t want to pay for a five-star hotel.”
Chinese property developers have been gripped by a liquidity crunch since 2020, hit by the double whammy of the coronavirus pandemic and new rules introduced by Beijing that restricted borrowing.
White Space, which shares revenue with landlords instead of paying them market-rate rents, also faced challenges amid waves of Covid-19 infections and lockdowns in Shanghai over the past three years, Ex said.
The start-up had recorded profits and a positive cash flow ever since its first month of operation until January 2020, according to Ex. But as the pandemic broke out, the company had to cease its partnership with one landlord that changed its mind and demanded full rent, she said.
“Both in 2020 and last year, there were moments of existential [questions],” Ex said. “I didn’t know if this company was going to make it through, and we could be out of business in four months.”
But White Space was able to keep operating throughout 2020 and 2021 and score more partnerships with landlords, Ex said. After China lifted all pandemic restrictions this year, the company resumed profitability and a positive cash flow, and was able to settle delayed payments from last year, she said.
As the world moves away from the worst of the pandemic, however, the global shared-space sector is at a crossroads. Industry giant WeWork, once valued at US$47 billion in the private market before going public in 2021, warned earlier this month that there was “substantial doubt” about its ability to continue operations as demand falters.
WeWork had a market cap of under US$300 million as of last week.
Rising US-China geopolitical tensions, along with years of pandemic restrictions, have also made Ex one of the dwindling number of American entrepreneurs sticking around in China.
Investor concerns over the political climate have “definitely slowed our growth”, said Ex. Still, local governments have treated White Space, which counts a Chinese citizen as a co-founder, “exactly the same as any other small business”, and the company does not feel any effect from worsening US-China ties on a day-to-day basis, Ex said.
White Space currently counts about 3,000 active customers, mostly mid-sized companies, spanning more than 70 industries, according to Ex.
The company’s next major project is a mini-program that facilitates booking, which is slated to be tested in September and launched in October, Ex said.
