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Co-working has emerged as a tough competitor to traditional rental and lease-based living solutions. In many developed countries, it is already a successful business concept. It is quickly gaining ground in other countries as well. But do these trends automatically indicate that co-living is a promising business opportunity everywhere else? Is there a possibility that a market demand for co-living is already present? Which customer segments it caters to? How difficult is it for a co-living business to create brand distinction? What role do digital technologies play in a co-living business? What about competition? Can it serve the luxury segment? If it turns out to be a simple concept, will investors be interested? In this blog, we will explore and examine.

10 Reasons: Co-Working as a Business Opportunity

Market already Exists

People move to urban centres for reasons related to jobs, studies, profession, or starting a new business. It is not something new. They need places to stay. Traditionally, this requirement is fulfilled by rented solutions. Co-living has emerged as an alternative to a massive market segment comprising students, job seekers, employed, professionals, and even aspiring entrepreneurs. So, if there is a market demand for rented solutions, the same is available for co-living spaces too. New players need not dig much into discovering whether there is market demand or not. Although this does not negate the need for market research for deriving insights in other areas it makes the job easier for new businesses. New players can quickly shift their focus to address more advanced areas of assessment. When a market is already in place, it is easier to generate macro data and insights. New businesses can come up with better offerings in contrast to what traditional rented solutions provide. If competitors already exist, it is an even better sign. Of course, the market research requirements will be different then. If you have a ship and you see an ocean, you know you have a chance at sailing.

One Solution for Multiple Customer Segments

Flats or apartments that are put out on rent vary on multiple grounds. Different types of rented solutions cater to different segments. For example, a 4-BHK fully-furnished space is ideal for families. It will not suit a student or a working bachelor who would rather go for a smaller space. On the other hand, co-living spaces generally offer the same setup for all types of customers. A co-living space does not make these distinctions unless it is a niche-specific one. What a student can use can also be used by a working bachelor. Co-living offers uniform solutions. Of course, a family may not ideally choose to stay in a co-living space. Families are also not a target segment for co-living spaces. The point here is that co-living offers the same setup and facilities for its different customer segments. Co-living solutions are ideal for students, freelancers, employees, and professionals. The uniformity of solutions makes it easier for customers to choose a place of their choice more freely as in the case with hotels. Offering uniform products and services also makes it easier for businesses to manage their operations. It also helps them incorporate improvements in their services and solutions.

Caters to the new Generation

The requirements of Gen Z (and many millennials) are quite different to fit into traditional living solutions. Their lifestyles reflect an inclination towards individualistic living i.e. they want to have their freedom and set their own boundaries. This specific segment may find it difficult to kowtow to the terms and conditions set by others often found in traditional rental solutions. They may not find it comfortable to arbitrarily set rules and regulations. It is also true that sometimes unreasonable terms are enforced in traditional rental solutions. On the other hand, co-living supports individualistic living. It supports living with like-minded people or with people or professionals from the same community/discipline as their own. This particular demographic segment is growing fast in many countries.

Here, we must also understand that most traditional living solutions like rentals or PGs are not planned in the same way as a contemporary business does. The latter does it with enhanced awareness of customer requirements; there are business stakes involved. For example, a landlord may not mind if a tenant opts to leave. In business, you cannot let such things happen on a routine basis and choose to ignore them. Co-living as a business is a different story altogether. It is carried out with proper business planning. This is something that strikes well with the new generation.

Default USPs

Sometimes the nature of a business itself comes with strong selling points. Such businesses cannot be done without the features that lend those advantages. Co-living is one such type of business. It provides freedom and flexibility to customers that other living solutions ideally do not provide or they must be developed by customers on their own. For example, co-living provides extensively-furnished living spaces that can include a wide range of lifestyle assets beyond the basics. In rental solutions or one’s own house, one has to buy all the assets or rent them separately. In co-living, customers can check in and readily start using a living space of their own choice. Customers also do not have the burden of shifting bulky assets when they move out to another place.

Another default flex with co-living business models is its commercial structure. While rents have to be paid on a monthly basis, security deposits are usually only for a couple of months. Many co-living spaces also offer additional services and amenities on a usage basis.

So, when you start a standard co-living business, its standard advantages also get readily activated. This does not mean that there can be leniency in business management. If there are competitors in the market, you can focus on enhancing value propositions via additional or more relevant services and amenities.

Aligned to the Digital Age

Today we are living in a digital age where we carry out many of our essential activities via digital platforms. This includes banking, shopping, ordering food, travel bookings, mobile recharge and so on. This is the customers’ side of the story. Businesses or service providers are on the other side of this story. Most of their front-end and back-end operations are getting increasingly automated and digitised. Take the example of KYC. In many countries, where digital IDs or similar solutions are available, organisations have the option of carrying out the KYC of their customers in a matter of seconds.

Co-living is a modern business concept that relies on prevalent digital technologies. The use of online tools and technologies makes it feasible for businesses in this sector to reach out to customers from all over the world. Businesses can appear on search engine results. They can connect with their audiences through social media platforms. They can provide online booking and cancellation services over their websites and apps. Pictures and videos of services and facilities can be uploaded on websites and social media handles for customers to facilitate their purchase decisions. All these aspects of co-living strongly align with the digital requirements and practices of the present times.

Fewer Competitors

In trade and commerce, there is hardly any industry with no or little competition. Once competition sets in, it only keeps on getting more intensified over time. Exceptions are rare to this phenomenon. One reason for intensifying competition is the increasing number of players in a market. When a new player enters a market, they try to come up with better solutions and strategies. As more new players emerge, the market shares for each keep getting segmented. Each player then tries harder to consolidate their position and secure their respective shares. It becomes increasingly difficult for new and existing businesses to find value addition.

In co-living, competition is not absent but there are fewer competitors, especially in the emerging markets. There are opportunities for new as well as existing players to grab large market shares and possibly even become market leaders. However, fewer competitors do not mean players can afford to be careless with their business models and business plans and how they conduct business. It is just that their struggle with finding unique value propositions. If there are too many direct competitors, a new player will have to be better than all of them. Also, if the competitors are fewer, there is a high likelihood of the presence of customer segments that have not yet been catered to.

Luxury Living made Sensible

The luxury segment for any product or service market offers a lucrative commercial opportunity. It applies to living solutions as well. Here, luxury could mean a posh locality, a designer house, the presence of modern lifestyle amenities, etc. These spaces come with hefty rentals and security deposits but they also have customers. Different people have different reasons for choosing luxury living spaces. Some choose it because that is what they are accustomed to. Sometimes one has to live up to the standards of their peers and colleagues. Sometimes one or more reasons overlap. These values were traditionally reserved by rental and leasing solutions. Co-living spaces with the luxury tag emerged as an alternative for this specific customer segment and also brought luxury living within the consensus of common people. Earlier, it may not have made sense for an individual to rent a luxury apartment. But now availing a luxury lifestyle for living is as simple as booking a hotel room. Whatsoever reluctance one may have had about luxury living has been resolved by co-living. The best part is that it is temporary. As an experienced business consulting firm, we always maintain that removing the psychological barrier to buying is a big win in business. If the experience is good, customers may stay for longer durations.

Simple Concept

Although co-living, as we know it today, looks like something new it is a revamp of something that has existed for a very long time. Throughout history, people have moved from their native places to new places for reasons related to their work, trade, or profession. It was only when they realised that their stay was going to be permanent or similar in nature that they considered buying land and building. Hotels, hostels, renting and shared living were the obvious solutions. Co-living brought them together in a contemporarily improvised form. In that sense, the essence of co-living is not something new which is to provide a lifestyle-based living solution for short-term needs. Once this basic essence is grabbed, co-living becomes a simpler concept. From a business perspective, this is the crux of the value proposition for any co-living enterprise. Based on this understanding, the other elements in the business model can be better defined. For example, the awareness that co-living is a short-term requirement makes it easier to identify the ideal customer segments. It is also not difficult to identify the services and facilities that are required in a co-living space because of the commonly-held pre-existing awareness and experience of lifestyle and living requirements. However, the investments and purchases should be made only after preparing a co-living business plan.

Growing Sector, Easy to attract Funding

The economies of countries are always in a state of crisis on one front or the other. Not all economies can afford to provide commercial encouragement to startups with wide and open arms. Startups have become highly dependent on private investors and institutions. But there too, many factors come into play. Individual private investors may not be easily interested in a business idea unless the returns are obvious to them. In times when markets are getting saturated cutting across industries, it has become very difficult for startups to attract funding from private investors. On the other side, private sector banks and FIs charge high rates of interest. With every passing year, getting funds for business capital and initial setup requirements keeps on getting more challenging.

As a relatively new industry and less-explored business avenue in the majority of markets, co-living provides an exception to the challenges discussed above. In markets where co-living is still a novel concept, private investors and institutions are more likely to show an inclination towards funding co-living business ideas. The possibilities of good returns are always high in a growing sector that has performed elsewhere in similar market conditions. However, entrepreneurs need to be careful with their co-living startup pitch and exercise due diligence in preparing the same.

The essence of co-living is not something new and it is to provide a lifestyle-based living solution for short-term needs. It has emerged as an alternative to a massive market segment comprising students, job seekers, employed, professionals, and even aspiring entrepreneurs who often show an inclination towards individualistic living supported by co-living solutions. The uniformity in co-living solutions also makes it easier for customers to choose a place of their choice more freely. The same element makes it convenient for businesses to manage their operations. What also strikes well with the new generation of customers is that co-living as a business is managed professionally unlike many traditional living solutions. Co-living provides greater freedom and flexibility to customers that other living solutions ideally do not provide or they must be developed by customers on their own. Co-living thrives on modern-day digital technologies that help connect it better with the new generation of customers while lending it operational and management superiority. With fewer competitors in growing markets, there is a high possibility of grabbing larger market shares and possibly even attaining market leadership. Co-living spaces with the luxury tag have emerged as a substitute for a specific customer segment that seeks luxury living and it has also brought luxury living within the consensus of common people. In markets where co-living is still a novel concept, private investors and institutions are more likely to show an inclination towards funding co-living business ideas.


How do I market my co-living business?

Good service is the best form of promotion. Here are some add-ons for consideration:

Establish marketing and promotional collaborations with companies and educational institutions

Associate with corporates as their official co-living solutions provider

Inspire customers to share good reviews on the business’s website and social media handles if they had a good experience

Address critical appraisals positively and constructively on all platforms (on-site and digital)

Invite testimonials from customers who are renowned personalities

Maintain a content-rich website/app

Follow SEO principles, consider paid promotional options

How to start a co-living business?

Co-living is a relatively new concept (as we know it today) that makes it sailing in unknown waters. But the fundamentals of starting a business remain the same. Here are some key considerations for starting a co-living space:

  •     Market Research – Regulations, competition, demand, gaps, market size, targetable segments, consumer behaviour, pricing, dominant values and cultural factors, etc.
  •     Business Model Development – Value proposition, value chain and key activities, key resources and capabilities, key partners, revenue streams, major costs, etc.
  •     Financial and Commercial Planning – Demand forecasts, revenue projections, CAPEX & OPEX requirements, ROI and breakeven, etc.
  •     Operations Planning – SOPs, IT and process automation, SOP-IT integration, etc.
  •     Layout Planning – Visual appeal, space optimisation, revenue maximisation, etc.
  •     Hiring and Training Strategy – Emphasis on job as well as industry-specific skills and competencies aided by relevant training and development

For enquiries on YRC’s co-living business solutions or to speak to one of our expert business consultants, please drop us a message and we will reach out to you.

Author Bio

Rupal Agarwal

Rupal Agarwal

Chief Strategy Officer

Dr. Rupal’s “Everything is possible” attitude helps achieve the impossible. Dr. Rupal Agarwal has worked with 300+ retail e-commerce brands and companies from various sectors, since 2012, to define their growth strategy, push their limits and improve performance efficiency. Rupal and her team have remarkable success stories of helping brands achieve 10X growth.

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    The idea of having Ecommerce Consultants on-board from the beginning itself points towards reducing the involvement of the promoters in daily operations. Ecommerce Businesses willing to be a brand reaping profits & sustaining the competition must ensure that most of their processes should be automated. The more the manual intervention, the more would be the errors.

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    YRC Team of Ecommerce Management Consultants helps to make maximum of the processes system-driven to ensure minimalistic manual intervention.


    No matter how good your product is, the customer would know only if it looks good.

    Photography includes the following steps:

    • Cataloguing your products
    • Cataloguing your images
    • Backup your images (A few cloud storage solutions include Dropbox, Google Drive, Bitcasa, Apple’s Cloud Storage etc.)
    • Choose the right camera & lens (You may also outsource the photography to a third party agency)


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    Next comes SMM i.e. “Social Media Marketing” which as the name suggests including promoting your products on all the social media sites, email marketing, influencer marketing & several other BTL activities.

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    IT Integration involves connecting your offline inventories with real-time online webstore so when a sale occurs, inventories get deducted real time across offline as well as online platforms.

    This helps in accurate inventory management, maintaining the MOQs, re-order levels & achieving the optimum inventory levels.

    Some popular software include unicommerce, viniculum for your front-end website management & Genisys for your entire back-end Purchase, Production, Accounting, Invoicing etc. management.


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    • Where should your Warehouse be located?
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    • Should you be having your own delivery team in your base city?
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    At YRC, our warehousing and logistics experts can help you devise a strategy for all of the above mentioned queries and much more.

    We design the layout of the Warehouse considering the inward, goods processing, software entry, barcoding, outward, goods return, scrap storage, goods stacking & much more.

    Logistics route plan is devised considering the manufacturer to your warehouse and from there to last mile delivery locations.


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    Part 1: Choosing the right Platform:

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    Part 2: UX Designing:

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    “As per statistics, 68% of the customers abandon the carts before payment”

    An interesting UX ensures the customer sticks on to the website for a longer time.

    Part 3: UI Designing:

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    The UX designer maps out the bare bones of the user journey; the UI designer then fills it in with visual and interactive elements.

    If User experience is the bare bone, user interface wraps it up with an attractive cape.

    At YRC, our team if experts can help you develop the entire User Journey to ensure it is engaging!


    This step follows the “Designing” Phase, whether you have an in-house design team, freelance designers or an outsourced design company. It is one of the most exciting phases, as here you see your designs turning into products & your ideas turning into reality.

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    CPA detects the minimum & the maximum time involvement of a particular individual or team to execute the task, thereby arriving at the overall deadlines associated with the project.

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    Business Strategy includes the vision, mission, goals, business model, business plan & strategy for all the functions within the organization.

    Business Strategy is a well-defined plan that outlines who, what, where, why, how & when for the company; for example, who would be the target market, how to attract the target audience, when to launch new products, where to operate from, how to handle competitors, what would be the USP, what would be long term goal of the organization & several other answers to the 5Ws of Strategy.

    Business Strategy aligns the organization towards a common goal. Business SWOT helps company to identify & overcome their weaknesses & focus to sharpen the strengths. Business strategy forecasts future risks and helps business in building skillsets to overcome the potential threats.

    YRC’s Business Plan focuses on creating a “Blueprint” of the business, thereby deriving the feasibility of the concept & gauge whether the opportunity is lucrative to invest time, energy & effort. Business Plan creates cash flow understanding i.e. building inflow & outflow cash projections from Week zero to week 60 i.e. 05 year projection. Business Plan calculates the capital investment, operating costs, one-time costs, recurring costs & all the other numbers relevant to obtain the breakeven sales, return on investment, return on capital, internal rate of return & several other ratios. Business Plan is also one of the important requirements if you are targeting the “Investor Route”. Fund raising becomes extremely transparent & channelized. With business plan panned out clearly, the business will know until what point must it be stretched & where to stop, which reduces the probability of unplanned investments.


    Starting the concept of Ecommerce Fashion brand with Market Research ensures we get detailed understanding of the industry & this research report also acts as a social confirmation for your concept. Market Research helps in understanding the target locations, their population, potential online buyers for your product, competitors for each category, and top selling products of the competitors, competitors’ price range, offers & their responses & much more. Market Research helps in thorough understanding of your brand position as compared to our competitors. It helps in identifying gaps in the market, in your category along with the scope of the said product in the desired market. This will help in validation of your concept & prevents you from making the same mistakes as your fellow brands, eventually saving your time, energy & efforts. This phase is also a make or a break phase, as the market research study may at-times come up with some eye-popping numbers & statistics which might compel you to re-think on your product or category that you are planning to sell or alter your entire concept itself!! Market Research Reports analyse the competitors’ webstore for their traffic, conversion & sales. This is extremely valuable information to derive our inventory budgets & projections, which takes us to our next phase.