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QUESTION 7

How is office sharing business doing in Korea? What are some other “sharing” concepts
that are now commercialized?
Now, let’s look at how office sharing business is doing in Korea. As we can see from this graph,
there is an increasing trend throughout the year, in terms of number of shared offices and the
total market value. From 2017 to 2022, it’s expected to grow at a high annual rate of 63%,
reaching 770 billion won. This is due to the increase in shared office demand by large
corporations as well as startup companies, and as a result, this trend will reduce the burden of
holding real estate as an asset. Moreover, this trend will most likely stick longer after the
pandemic.

Another interesting point to mention is that, before WeWork entered Korea, there was
FASTFIVE, a company that engages in office sharing business domestically. In addition to that,
there are also some corporations starting to create a shared office with brand power, like
Hyundai Card, Hanwha, and Lotte.

Apart from co-working space, here are some other commercialized sharing concepts: self
storage, shared kitchen platform, and carrot market. We think that, this “sharing economy'' will
keep growing even after the pandemic era, as more products and services are being traded,
and allowing more value added activity to take place.

QUESTION 8
In order to get a deeper insight into the inner workings of WeWork, we had an opportunity to
interview a group of employees.
We asked them:-
1. What is WeWork’s future strategy? To which they responded:-
a. Leveraging data and a global network to increase membership sales and find
business solutions
b. Expand to Latin American countries
2. Is there any rental method that WeWork is considering other than the sub-lending
method?
a. Two different business models that WeWork uses is
i. Renting the entire building
ii. Partnership with the landlord
b. However, for a partnership business model, more workforce is needed
c. Currently, the company focuses on improving profits rather than
changing the business model
3. What are WeWork doing to improve profitability?
a. Although financial results have yet to be achieved, it is operating additional
solution services, including WeWork Labs, to diversify and differentiate revenues.

CONCLUSION
In conclusion, we’d like to point out the fact that WeWork’s quick and massive expansion comes
at a great cost. They need to have a better view of their bottomline instead of a unilateral focus
on their topline.

Our suggestions are:-

1. They need to modify their business model in order to lower rental costs and find new
ways to crack flexible deals with landlords
2. In order to do this, building a strong network among residential start-ups is essential
3. To sustain their current model, they need to find new revenue streams from ancillary
services and new verticals
Thank you!

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