“It’s almost 5 pm now. The weather here in Gurgaon standing at 46C is in no mood to provide respite from scorching heat anytime soon. Looking around, contrary to expectations, we find people all around working together comfortably in a pleasant environment, thanks to AC. A quick analysis shows the signboards of people from different companies spread all around the working space. “
This is the scenario of more than 10 million people presently working out of 900 co-working spaces dotting the whole Indian subcontinent. The co-working spaces in India has witnessed a rapid growth tangent for the past few years and naturally the question arises- has India finally adopted the co-working culture?
To answer the question, we at Thinking Spree dived deep in month-long research spanning across various online and offline channels. The report led to the generation of a plethora of insights that honestly confessing, we had never thought of before. So, to answer the question let’s rewind ourselves 10 years back when co-working spaces had just entered the Indian landscape. Pushed by the market dynamics and the advent of the service sector, from Regus, 91Springboard, etc. operating alone as virtual office spaces to more than 200 companies operating with a combined seating capacity of more than a million, co-working spaces have come a long way. Presently, more than 10% of the office sector is occupied by the co-working spaces, so it is safe to say that co-working spaces are finally on a boom.
What caused this explosion? Well, there are several reasons behind the scenario. Before we dig deep into them, it’s worth highlighting that the office space absorption in India stood around 41 mn sqft which is expected to grow by almost 10% per year. Definitely, working spaces are on a boom.
Startups are increasing rapidly
“The number of startups in India is expected to grow by 2.2 times till 2020 to reach a figure of about 10,000 from around 4,200 in 2015.”
Co-working spaces are particularly well suited for startups in India who have a limited team and are looking for optimization of costs. A majority of Indian startups are bootstrapped and thus look for cutting down on running costs for their firm. Switching to a co-working space allows them to lower their infrastructure costs by 30-40% thus allowing them to maximize their profits. Apart from cost optimization, working out of a co-working space poses huge networking opportunities for these nascent age startups to build upon their portfolio. According to Deskmag’s annual Global Coworking Survey, 71% of professionals reported a boost in creativity since joining a coworking space, 62% in improved work quality. Thus, with the boom of startups, the buzz around co-working spaces is here to stay.
Corporates opting for co-working spaces
“Large corporates make up to 50% of co-working space clients in India”
Large companies now constitute about half of the overall client roster for flexible co-working facilities as collaborative workspaces are gaining wider acceptance in India, according to a Knight Frank study.
As more and more workspaces are shifting towards optimization of costs and infusing creativity in their work environment, (read adapting to changing times) established firms are taking up more and more of co-working spaces. Looking towards dynamic work culture and boosting productivity, corporate players nowadays look for co-working spaces to bring about a change in work ethos, hence the co-working scenario.
Growth of the service sector and the gig economy
“Hidden behind the rapid growth of the service sector is millions of young, dynamic gig entrepreneurs who are here to disrupt the traditional service sector.” – The Ken
According to a recent survey by PayPal, one out of every four freelancers is an Indian. This speaks volumes about the staggering number of new-age entrepreneurs who are adopting the unconventional (read conventional in present scenario) gig economy in India. It is natural then that more and more freelancers are opting for flexible workspaces to operate from a pleasant and focused environment while ensuring they don’t have to dig deep in their pockets for office rents.
Thinking Spree’s research pinpoints
Co-working space occupies 10% of the total industry office in India with Bangalore sitting at the top and Delhi-NCR coming to a close second
The co-working trends is expected to capture up on the tier-2 markets in the near future with more than 100 coworking spaces already established in Lucknow, Pune, Kanpur and other similar cities.
Gurgaon is emerging as a new hotspot for co-working operators with total footprints standing at more than 4.5 mn sqft by major players such as Wework, Cowrks, 91 Springboard, etc and many local players too.
Hospitality supergiant OYO has already ventured in the co-working market competition under its brand name ‘powerstation’ and acquired Innov8 in a deal valued at more than INR 200 crores, thus indicating its aggressive growth plan
What ahead?
The co-working space has finally caught up with Indian markets with a much more aggressive growth projected ahead. To substantiate, the co-working industry has been estimated to reach $ 2.2 billion by 2022 and the co-working penetration is expected to increase to 5.7% in 2022 from 0.7% in 2017 in India. The cost-savings are estimated to be 20% to 25% as the system of traditional offices reduce. With startups and corporates alike preferring co-working spaces now (oh, by the way, don’t forget freelancers), in the coming years, it would come as no surprise if co-working space establishes itself as the working space in India. So, when are you switching to a co-working space?
The article is based upon the independent research carried out by Thinking Spree’s experts. To get to know more about the report, reach out to us info@thinkingspree.com
About the Author:
Rana Madhvendra: Student, startup enthusiast. I write long sentences and yet find myself to be a minimalist. Unironically, that's ironic.