共享公寓在台灣是近幾年開始漸漸發展起來的空間營運模式，在國內又稱作 Co-Living 或 Share House，意思是一群人共同分擔一個居住空間的租金並生活在同個屋簷下，房客之間可能是陌生人或原本就認識。以往的共居大家可能會聯想到單純分擔房租，然而現在新興的生活模式和以往傳統的家庭式公寓分租又不太一樣。
Co-Living is becoming a new lifestyle in Taiwan - also known as ‘Share House’. People live with others while sharing the rent. But now, the new co-living lifestyle means more than that.
Generally speaking, traditional house leasing involves only tenants and landlords (property owners). The housing spaces, sometimes, are unlikely to be well managed in such manner that may affect living quality. Tenant-landlord might also run into disputes due to lack of mutual communication. 9floor is a co-living operator aiming to solve this tenant-landlord problem by centralizing space management and providing social communities to improve tenants’ living experience. For example, they create comfortable personal and public areas, and organize community events to increase the social opportunities for members, while nourishing social bonds among the members. This living culture seemingly could satisfy the social needs of the younger generation living a stressful urban life. The concept appears to be feasible and appealing, but why did Wanhua 9floor fail?
成本管控的重要性 Importance of Cost Control
Firstly, cost control is vital for co-living operators like 9floor. As a subletting tenant, 9floor’s main margin comes from the gap between the revenue earned from membership fees and the basic rental cost that is payable to the landlords, operation cost, and other upfront costs such as interior fit-out construction. It is quoted that 9floor’s final fit-out cost was something like NTD 20 million, which was far beyond the initial budget. There is definitely room for improvement in the aspect of budget control. According to the article below, 9floor had to pay NTD 440,000 monthly rental fee to C.C. House, which means they will have to have the 22 rooms fully occupied every month for 12 years in order to break-even. High fixed costs without corresponding income make their business increasingly difficult to sustain. DANKE Apartment (“蛋殼公寓”, a subletting firm in China), recently found to be owing rents to their landlords, is another example reflecting co-living operator striving to survive, and the landlords' attempt to reclaim the house forcing the members to be moved out. DANKE Apartment operates more than 430,000 apartments in 13 cities in China. These properties led to a large number of accounts payable, and the Covid-19 Pandemic has made the situation even worse.
Furthermore, even though 9floor has carefully selected its members through interviews, there may still be disputes between house members as they live under one roof and face each other on a daily basis. Mr. Pan, the co-founder of 9floor, once mentioned that they had to be responsible for resolving disputes between house members to keep the community running smoothly. However, the costs of time and personnel involved in solving such matter will increase rapidly as the firm expands. Therefore, software, hardware, and personnel costs should be considered thoroughly before carrying out the plan. Major changes after plan execution should be avoided as it may incur more unpredictable cost to adopt such change.
Highly utilized space can be critical to the success of co-living operators. Wanhua 9floor designed their space in a way that is commercially feasible to operate on and generate more income. However, due to the pandemic, many activities have been suspended which makes it difficult to meet its operation cost. In addition, when it comes to personal privacy, the design of living space becomes very important as the fine line can make a big difference to those people concerned with privacy and those enjoying community culture. Therefore, managers should plan the public spaces and rooms properly and optimize space efficiency without affecting tenants’ living quality.
產品定位是否有足夠市場價值 Does it worth the Value?
What are the problems behind 9floor’s business model?
We can divide housing market into several segments: people with higher rent-paying ability and others with lower rent-paying ability. Those who are able to pay higher rents may be white-collar workers, foreign expatriates, and young professionals. However, these groups usually choose service apartments or hotels from what is available on the market. On the other side, the customers 9floor is targeting are mainly young people, including foreign students, backpackers, or new graduates, etc. However, these people may have relatively low rent-paying ability. They would rather prefer lower rent houses than those expensive ones 9floor offers. Hence, this is probably the reason why 9floor has not been able to profit from the market they are targeting; moreover, foreign backpackers and students are not able to stay in Taiwan due to the pandemic. These amounting problems make Wanhua 9floors’ business harder to sustain.
Wanhua 9floor's main goal is to provide "community" service as members get social opportunities in this living space. The question is: how valuable is this sense of community to its members? In fact, it is fair to say that the value of community is created by the members themselves. 9floor can be considered a platform for members to stay connected. If such connections between members do not stay strong, Wanhua 9floor will eventually lose its value. WeLive, another co-living brand owned by WeWork, also encountered the same problem. WeLive originally planned to allow members to mingle with each other easily in their well-designed spaces. However, the space later changed to a short-term rental space that can be found on Airbnb websites. This approach doesn’t seem to be matching with the brand’s value perceived by its potential members. That’s why there have been only two sites so far, which is far from the initial plan they imagined.
Members may get along well and become good friends. In this case, these members are likely to move into a relatively affordable place together and leave 9floor. After all, the community is created by members themselves; 9floor is merely a platform for them to connect. Loss of members leads to high vacancy rate, which takes away bonds among house members, and without enough income, Wanhua 9floor will not be able to run sustainably. Thus, space providers should offer other services apart from community to appeal to their members to stay connected on this platform.
To conclude, Wanhua 9floor has a great co-living concept and a feasible business vision of future co-living style. In order to have a sustainable business model, it is important to establish a workable business plan with good product positioning strategy. Such strategy must reflect the true community culture that will connect its members through its platform and differentiate itself from other different co-living brands, in order to bring in more new members through expanding its brand reputation.
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