I’ve been in China for nearly a year now. Originally working for MLS Business Centres in the UK, I arrived in Shanghai via a circuitous route from New Zealand, which included lengthy stop offs in Australia and Britain.
At the time MLS was rapidly expanding in the UK, having effectively seized the market niche that existed at that time for affordable and flexible offices space that suited the needs of small businesses. The majority of UK serviced office providers were focused on the corporate market, trying to meet the needs for large open plan floor plates and glass and marble fit outs.
By contrast, the board of directors thought MLS could exploit globally the same niche they had made in the UK market. The company put plans in place to expand to India initially and then China. Which is where I come in.
My first task was finding a building in a suitable location in Shanghai, the first city we decided to enter in the Chinese market. There were a number of steps. From agreeing to leasing terms, managing our way through registration and setting up a Chinese subsidiary to project management and building brand awareness, it would be fair to say it’s been a fascinating, frustrating, exciting and elating experience!
I learned some key lessons along the way. There are two speeds in China – very fast and very slow. And despite my best guesses, things often defy my expectations. I had expected major bureaucratic problems from a government that represents 1.3 billion people. Instead, the set-up process was relatively straightforward, allthough it did involve quite a long wait. I had also expected the process of agreeing to a lease on a building in Shanghai’s central business district (CBD) to be a simple, straightforward process. It wasn’t.
However, after several failed attempts to get a building that suited our needs in terms of size and quality of accommodation, we finally secured a floor in the recently completed Eton Place west tower. After overseeing the transformation of this shell into a fully fitted and functioning serviced office, in January 2008 we opened our doors and were ready for business.
My next job was to find a way to demonstrate how we provide value to the local marketplace and help potential clients distiguish our brand from others. I also needed to take stock of the fact that I was offering the Shanghai market a product that looked and felt quite different to the 70-plus UK serviced office locations that MLS was already operating successfully.
In fact, Eton Place was exactly the kind of shiny-glass-and-marble corporate offering that MLS had normally steered away from in its home stomping ground.
The absolute necessity of having a local team was brought home to me recently when we looked into why we weren’t picking up new business quickly enough. It transpired that one of the reasons was because I had been dealing with potential clients’ representatives, who had been sent to scout our offering, while at the same time reaching out to the company’s actual decision-maker. This is not a recipe for success in Shanghai.
Instead, you must ensure the appropriate deference is given to those who hold the real power in a company. The ability to form multi-level relationships with your potential customers – while also showing respect to the overall boss – is a key element to getting deals done.
Now we are making excellent progress. We are on target and looking to take on further locations in Shanghai and other key Chinese cities in the next 12 to 18 months.
And while serviced offices still have only a very small share of China’s total commercial office market, our share is growing. Most firms are generally more accepting of the enormous benefits and cost savings a good serviced office can give them.
Joe Clark is chief operating executive of MLS Business Centres China. MLS was formed in 1998 to serve a niche in the marketplace and operates affordable, high quality serviced office buildings in key UK key cities and international locations. MLS currently runs 75 centers within the UK and internationally.