IWG Plc Expands In The Indian Flexible Workspace market, Unleashing New Opportunities For Businesses
IWG caters to the evolving needs of modern businesses seeking agility and cost-effective workspace solutions and has reported encouraging growth riding on the back of a growing flexible workspaces industry both in India and internationally. By establishing a strong presence in major cities and business hubs across India, IWG provides enterprises and businesses with flexible work environments that promote collaboration and productivity.
As someone who has been driving the growth of flex spaces across India, Harsh Lambah, Country Manager - India, Vice President Sales - South Asia, IWG, shares his views on the Indian Flexible workspace market, in addition to highlighting overall market trends and developments in the sector.
Tell us about IWG and its strategy for expansion?
IWG Plc, the world’s largest provider of hybrid working solutions including office and co-working space, with 3500 locations worldwide in 120+ countries currently operates under its flagship Regus and Spaces brands in 16 cities across India. IWG is focused on expanding into smaller tier 2 and tier 3 markets while simultaneously strengthening its presence in larger cities, as well as introducing new brands across India. We are witnessing strong demand for our network as corporates across the country are keen to adopt a combination of office and remote work, while providing their teams with greater flexibility and benefitting from lower costs As hybrid working becomes the new work paradigm, organizations of all sizes are appreciating the benefits this work model offers – the flexibility to work from multiple workspaces as well as home, the consequent reduced commute for employees, and the resultant improved work-life balance. IWG's key expansion strategy has been through the partnership model that helps it leverage existing office infrastructure across cities through strong local partners.
Please tell us about your franchise partnership programme
Ans. We have seen significant demand emerging from smaller, regional towns for co-working and flexible workspaces. IWG's partnership program was designed to help the brand expand its network of flexible workspace locations by partnering with local property owners and investors, giving them an opportunity to enter the rapidly growing hybrid workspace market. As part of this initiative, IWG provides access to its network of brands, systems, and support, including training and development, and ongoing operational support while leveraging the franchise partner’s property in the city. The partnership and franchise model allows IWG to expand its network in a cost-effective manner while leveraging the expertise of strong local partners. This has helped IWG quickly enter new markets and provide flexible workspace solutions to a broad range of customers.
What is your outlook on the future of the co-working sector?
The sector is expected to constitute 30 percent of the overall office space in India by 2030. Businesses small to big are proactively looking to change their work environment and make it more flexible and resilient. Working professionals have shown in repeated surveys that they prefer flexibility in their work life. On the other hand, economic pressure is making it hard for businesses to commit to long-term leases or expensive fit-outs of new buildings when they don’t know what the headcount is going to be in a year’s time. Working through a global pandemic has proved to businesses that remote working functions effectively, regardless of if you are an international conglomerate or a sole-trading freelancer. Around the world, we are increasingly witnessing large corporations trying to deconcentrate their workforce, bringing them closer to the communities in which they live. This is giving increased prominence to the hub-and-spoke model of working, which is beautifully supported by flexible and co-working spaces. Realizing that it’s good for their workforce, India Inc is also seeing that it can reduce capital costs and even meet their ESG goals.
Given that, there’s a vast untapped market in India across the upcoming tier-II and tier-III cities, how is the company planning its presence across the same?
IWG’s network in India is currently spread across 16 cities through 90 locations, and we are bullish about our growth plans. In 2023, IWG has ambitious plans for growth to add up to 1000 locations across its global network. Through a successful partnership model now in place, we are focusing on expanding our network across tier 2 and 3 cities in India with a demonstrable return on capital and strong growth prospects. One of our largest franchise deals, signed recently was with Conjoinix, a leading real estate, leasing, and co-working company. The 18-center partnership will expand our presence further in Delhi-NCR, Haryana, Uttar Pradesh, J&K, and Gujarat, and marks this as one of the largest deals by an individual franchisee in the brand’s history. IWG’s partnership model has reaped tremendous results as it provides partners with a one-of-a-kind opportunity to make a lucrative investment that blends market-leading experience with strong local knowledge. We continue looking for more partners and are committed to being the preferred brand for real estate owners in all key markets to help grow our network.
What are the factors that have boosted the segment’s growth?
While the flexible workspace segment was on a growth curve even before the pandemic hit, Covid-19 brought in massive disruption for corporates across sectors that further accelerated growth for the sector. It forced corporates to rethink their workforce management strategies to make business operations nimbler and more resistant to such disruptions. When working from headquarters became challenging, co-working and flexible workspaces helped corporates set up a hub and spoke model that included a network of satellite offices connected to a centralized HQ. This model continues to enable corporates to decentralize the workforce while ensuring business continuity. As businesses increasingly develop hybrid work policies, its benefits are being increasingly felt by employees who are commuting less due to working closer to their homes or client locations. Not only do employees benefit from a dramatically improved work-life balance, but the model also positively impacts corporate bottom lines along with employee bank balances. By switching to a hybrid model, companies can save on average US$11k per employee, while also minimizing their carbon footprint. In the years to come, the ‘hybrid revolution’ will be recognised as a seminal moment in history, making for a more sustainable business model that reduces capex, is more employee friendly and being less carbon-intensive, is also better for the environment.
