Find here the full China paradigm episode 50. Learn more about Shiny Cheng’s story running an apartment renting business in China and find all the details and additional links below.
Full transcript below:
Matthieu David: Hello everyone. I am Matthieu David, the founder of Daxue Consulting, a strategic market research company based in China, and this China marketing podcast, China Paradigm. Today, I am with Shiny Cheng. You are the founder of Shinjia. In Chinese, Shinijia is a way of saying “a comfortable house for you” or “a more comfortable house.”
I am not totally sure about this, but in Shanghai, under your management, you have more than 1000 apartments that you are renting out. They are beautifully furnished and already furnished and renovated. I saw the pictures. Actually, it looks like they are pictures of the most beautiful Airbnb you can find.
You started the apartment renting business in China about seven years ago. You started without investment, fully bootstrapped. And now, you have a footing in Shanghai. And as I was saying, you have 1000 apartments under your management. You started the apartment renting business in China very young. I feel it’s nearly just after graduation. That’s something that I’d like to know more of as well. Thank you very much for being with us on a Saturday. That’s why there aren’t many people in your office currently. For people listening to us, we are recording the video for this interview as well. My first question is, what’s the market sizing of your apartment renting business in China? It could be in terms of revenue, the number of people, or the number of apartments. Is it 1000 or more?
Shiny Cheng: Okay. Thank you, Matthew. Hi, I am Shiny. Actually, it’s not 1,000 apartments. Sorry. I want to correct that. It is 1,000 apartment rooms.
Matthieu David: I see.
Shiny Cheng: Basically, my apartment renting business in China is about co-living apartments. So, we provide a very good and unique design at a very good price. We provide shared apartment rooms to young professionals, students, and also international young workers are living in Shanghai who want to find roommates in China. Most of the apartments are in the downtown of the city.
Actually, I started my apartment renting business in China when I was 23 years old. So, I just came to Shanghai after university. I couldn’t find the ideal apartment I wanted to live in. I wanted to live in a downtown apartment in Shanghai. The rental was always increasing. So, I couldn’t find them. My ideal apartment has a good price and also a good design. So, this was my problem back then.
So, I started rental housing in China, and I did the interior design. And also, I chose a very good location. And I had my roommates, so I did not need to pay the rent for rental housing in China. I found out this was a good business opportunity.
Matthieu David: So, what you are saying is that you didn’t have to pay the rent for rental housing in China because you found roommates who were paying a bit of a markup. So, they were paying for you, right?
Shiny Cheng: Yes, because I made the apartment nicer. I added value to it.
Matthieu David: I see.
Shiny Cheng: Actually, in the beginning, there were 95% foreigners in Shanghai. But now, it’s like 70% of Chinese who are living in my apartment.
Matthieu David: Wow.
Shiny Cheng: They now like my apartment more. And also, we didn’t do any marketing in China. We just started advertising three months ago. Already, it’s 70% of Chinese people living here.
Matthieu David: Impressive.
Shiny Cheng: Yeah. Like many startups had huge investments, but I didn’t have that time. Eight years ago, I didn’t even know what an investment was. I was very brave with the first apartment I rented for apartment renting business in China. It was quite risky. I got the key from the agent, and then I said I could give him a double agency fee if he gave me the key for three days.
And in the three days, I did the decoration very fast and rented it out. Then, I paid the owner the rent for rental housing in China. Probably, if I had ¥20,000 in my hand, I could do the next one. So, it’s a lot of cash flow. So, it’s like you can start from zero. We have our decoration team. We have designers. We also have a factory for the furnishing. So, it’s a lot of work. It’s not like doing everything yourself in the beginning. There is a lot of cashflows involved. Yeah.
Matthieu David: I see. So, if I understand well, you have 1,000 rooms. So, it’s a bit less than 1,000 apartments. Maybe 700 apartments.
Shiny Cheng: No, it’s like 200 apartments but 1,000 rooms.
Matthieu David: Okay. So, on average, you have five rooms per apartment.
Shiny Cheng: More than 200. Maybe, 400-500.
Matthieu David: I see.
Shiny Cheng: Now, it’s like probably 900 rooms. It’s between 900-1000 rooms. But generally, it’s more than four rooms in one apartment.
Matthieu David: I see. It’s a very interesting format because I believe the four or five rooms are more difficult to start rental housing in China to one single person. And actually, you are making it easier for the landlord to start rental housing in China to 4-5 people through your platform. You don’t have to take care of so many people. So, as I understand in terms of your business model, people pay you or your platform directly. I went on your website, and for each apartment, there is contact. There is a specific person in charge. I don’t know if it’s someone already living in the apartment which is going to be in charge of the others or someone from your company. But basically, they contact this person. They pay you. And then, you have the rent for rental housing in China you pay to the landlord. I believe that it’s a long-term lease, like three or five years, because you renovate it. So, you have to have stability on the lease. And that’s your business model, isn’t it?
Shiny Cheng: Yeah, people pay me directly because I’ve started rental housing in China from the owner for ten years. The people you contact for an apartment are my salespeople. Also, people can list apartments on the website. So, some people are also listing their own apartment on our website. But in the beginning, we only used this within ourselves. Now, people from outside also sometimes use our website to list their apartments or look for roommates because this is only for roommates.
Matthieu David: I see.
Shiny Cheng: Now, we are also trying to create a roommates’ platform.
Matthieu David: That’s something which makes me a bit confused because I saw a button which said I could add my own apartment. And from my understanding, you were managing the apartments from A to Z. So, I understand that’s a new feature. How much do you charge in terms of commission for them?
Shiny Cheng: There is no commission on that. They can just list on the website. It’s in the trial stage. We are just testing it out. Also, it’s not my main apartment renting business in China. The cash flow is coming from my existing apartment renting business in China. Currently, traffic isn’t much. But in the future, when we do more promotions, I want to create a handyman app so that if people have any problem in the house, they can order from the online marketplace in China. So, it’s a very simple MVP.
Matthieu David: For people listening to us who don’t know, MVP means minimum viable product.
Shiny Cheng: They pay service charges to us. We don’t charge any commission.
Matthieu David: I see. I want to make sure that I’m not missing anything from your business model. I feel that the rent for rental housing in China is not the only thing you provide. I am sure that you also provide other services. Am I correct that it’s more than just the rent for rental housing in China? I am sure that you are not only providing the place. Could you tell us everything you provide? What’s your value proposition?
Shiny Cheng: We help with the product design and renovation for the owners. Usually, the apartments in the downtown are very ugly because owners are buying the apartments not to live in them but as an investment. So, we provide renovation and management for the landlord. We also provide handymen as well as cleaning services to our tenants. So, the landlord doesn’t need to take care of all the problems of the house.
Matthieu David: I see. So, can we say that you provide cleaning and internet services? You have someone you can call for any issue which is happening. So, if someone has a problem with their washing machine or anything, you would be there to answer in Chinese and English.
Shiny Cheng: Sometimes, the owners let us manage any problems the tenants might have.
Matthieu David: So, the value proposition is on both sides. So, the tenant rents rental housing in China, and the owner of the apartment doesn’t have to care about anything.
Shiny Cheng: Yes. So, in the future, we can make money from both sides if they want maintenance service.
Matthieu David: I see. I understand. In terms of client acquisition, you said you didn’t do any marketing. Actually, I went on your website and analyzed it. I used a software called SimilarWeb—I don’t know if you know it—and I found out that indeed your traffic on the website is not very high as you mentioned before. 40% of the traffic is people directly going on your website because they already know it. So, it’s not like a first acquisition. You get about 15%, which are links sending you traffic and 47% from Google by doing research. This is data from SimilarWeb. Most people who want to find roommates in China find your website through research about the online marketplace in China. So how do you find clients? Usually, before I interview people, I get a good sense of how they acquire clients. But in your case, it’s much more difficult. How do you get your clients?
Shiny Cheng: Yeah, that’s a good question. Actually, my website is MVP. It’s not meant for getting clients at all. Because I am not a tech person, I’m still looking for a technology partner for this roommates’ platform. I didn’t find one when I started. So, I didn’t do a lot of promotion and other technology-related activities on my platform. That was my weakness. So, in the beginning, we did some promotions on some international websites in Shanghai. It’s called Smartshanghai.com. And also, I was promoting on Facebook. But actually, to be honest, I think 80% of our clients are acquired through referrals. They are neither from Smartshangai.com nor Facebook. Only 20% are acquired from online marketplaces in China. My salespeople have been at my company for eight years. So, they have many connections. And their connections introduce clients to my company. We weren’t promoting on Chinese websites, but we’ve started to promote in China. And now, so many Chinese love our apartments. Last year, we had 30% of our tenants being Chinese. But now, around 70% of people living in our apartments are Chinese.
Matthieu David: Was it 30% last year or in the beginning?
Shiny Cheng: In the beginning, it was around 5%. The percentage of Chinese tenants in our apartments was less than 5%.
Matthieu David: So, within one year, there was an exponential increase in the percentage of Chinese tenants.
Shiny Cheng: In seven years, the number of Chinese tenants increased from 5% to 60%-70% now.
Matthieu David: I see. So young Chinese people working in Shanghai and not from Shanghai who are struggling to find apartments downtown and don’t want to live very far go to you because it’s much more convenient to share an apartment. It is safer going through you. I believe that’s also a value proposition you bring.
Shiny Cheng: I think it’s also because the Chinese economy is improving and the salaries of young people are increasing. So, the apartments become more affordable. They want a good location, good quality, and good service in an apartment. And also, they want to find roommates in China someone who are international.
Matthieu David: Interesting.
Shiny Cheng: I think most of my Chinese clients are also international who want to find roommates in China from other countries. Some are working with international companies.
Matthieu David: I see. So, most of your apartments are in Jing’an which is one of the most famous districts where people want to live. It’s a very nice district but very expensive at the same time. And it’s very interesting when you say that people who want to find roommates in China from other countries—whoever they are, Chinese or non-Chinese—will tend to go to you. So, 70% of your tenants are Chinese, but you define them with an international mindset because actually, they may live with people from different countries.
Shiny Cheng: Yeah, exactly. Some Chinese told us since they had been studying in America, Europe, or Australia for four years, when they come back, it’s hard for them to have Chinese roommates. They want to find roommates in China from other countries. After studying abroad for so many years, they realize some cultural changes as well. So, the Chinese love us because of the international community.
Matthieu David: I see. I am on your website at the same time, and I see the pictures. I feel that you made a lot of effort on pictures. Your story and what I see on the online marketplaces in China reminds me of two things. The founders of Airbnb found their first client because they advertised on Craigslist. So, let’s say they didn’t advertise on SmartShanghai.com, which is basically the same as Craigslist for foreigners here. So, they had to go through another platform to get their clients at the beginning because their platform was not very famous. That’s the first similarity I am seeing with your apartment renting business in China. The second point is that Airbnb took off when the pictures were good, bright, and beautiful. When I go on your website, I feel that you made a lot of effort on the pictures. Am I correct that you made a lot of effort on the pictures and so on to start rental housing in China?
Shiny Cheng: Yeah. Exactly. Yeah. Every single picture is taken by a professional photographer. There are many clients who even say when they walk into the apartments; they are even more beautiful than they are in pictures. We really care about every detail. So, both the products and the pictures are good. Actually, the vacancy rate is around 4%.
Matthieu David: The vacancy rate is around 4%. So, the occupation rate is 96%, which is extremely high.
Shiny Cheng: It’s much higher than the average rate of around 50% in the industry. I think this is because of the quality of the apartment and photos.
Matthieu David: To describe the apartments and the pictures I see on the website to people who are listening to us and those watching us as well, you paint the apartments in different colors as well to create more volume, I believe. The furniture is modern and a bit vintage. You have paintings and photographs on the walls. They are well-decorated with flowers. The lighting is very colorful, which makes the apartment much brighter.
Shiny Cheng: Yeah, exactly. We really care about these details because our clients are young. They are mostly students or just working for a year or two. So, their salaries are not that high. They are probably paying half of their salaries for the rent of rental housing in China. In this industry, people don’t usually do the decoration of very good quality because that means higher costs. Because it’s a shared apartment, my clients can only afford around 4,000. If they could afford around ¥5,000, probably they would start rental housing in China to rent a single apartment. They will not rent a shared apartment. So, for us, if we improve quality, it means our profit margin will be lesser.
The owner of a popular Chinese platform even said what I am doing is very dangerous because he thinks that I spend too much money on
decoration. Actually, he said, it’s quite
a ridiculous industry. But now, many people in the industry are suffering. And
I am very happy because I have a 96%
occupancy rate. This is because of the
investment I made in quality. Actually,
it’s really paid off. Many people thought
what I was doing wasn’t right because people were spending less on quality
while I was spending more. To them, it wasn’t very healthy. Many people thought
I was doing a very risky apartment renting business in China. So far, what I did has brought very good results.
Matthieu David: And your apartment renting business in China is only in Shanghai and mainly in Jing’an. Is that correct?
Shiny Cheng: Yeah, mainly in Jing’an. It’s also in People’s Square, Xujiahui, and other places. Actually, there are many places, but 70%-80% of them are based in Jing’an. Other areas also have at least 100-200 rooms.
Matthieu David: Got It. So now, I understand. You get a few of your clients on online marketplaces in China from third-party platforms such as smartshanghai.com and so on, but you get most of your clients through word of mouth. That’s what, at EO, we call Net Promoter Score (NPS). You have a very high Net Promoter Score. People recommend you. Right?
Shiny Cheng: Yeah, exactly. Also, we have sales.
Matthieu David: How does this work?
Shiny Cheng: People who see the advertisements on websites come to see the apartments. Also, people who refer their friends take them to view the apartments.
Matthieu David: Okay. But these sales don’t generate new leads. It takes care of the leads, which are inbound or reaching out to you.
Shiny Cheng: No, it generates new leads. They promote our website on their social media platforms.
Matthieu David: I see. So, it’s more marketing than direct sales.
Shiny Cheng: But we don’t have much staff doing that. We have three full-time salespeople and two part-time salespeople.
Matthieu David: How many people do you have in your team?
Shiny Cheng: They are 30 in total.
Matthieu David: 30. And you said that the main function is sales. I understand that it’s about 10%. Then you have decoration. Could you break down what the functions are in your team?
Shiny Cheng: More than 70% of my team management in China are into product design.
Matthieu David: Product?
Shiny Cheng: Yeah, product. I am referring to designers, project managers, and so on. Around 70% of my team is part of the product team. The marketing team makes up around just 10%. The product team makes up 70% of my team. The service team is around 30% of my team.
Matthieu David: Okay. Interesting.
Shiny Cheng: Product comes top, followed by service, and then marketing. I am not doing a lot of marketing. Actually, I am terrible at marketing.
Matthieu David: Before we started, you mentioned three challenges of doing business in China you are facing. One is the regulations. It will be interesting to understand why you mentioned regulations. Another one is cashflow. I think you already mentioned that. We understand why cash flow is an issue because you have to renovate before people start rental housing in China. That’s the cost, right?
Shiny Cheng: Yeah.
Matthieu David: And the location is one as well. As far as I understand, to find the locations and maybe negotiating the contract are challenges of doing business in China as well. So, could you go more in-depth on those challenges of doing business in China?
Shiny Cheng: Location is one of the big challenges of doing business in China, especially in my industry. The economy of Shanghai is improving every year. So, people like going to Shanghai. It’s the number one destination for people from other cities. Every year, almost six million people are looking for apartments in Shanghai.
Matthieu David: Wow. So, it’s like 20%-25% of the population who are moving from one apartment to the other.
Shiny Cheng: Yeah, they are looking for apartments. People already living in Shanghai are moving apartments, and people now coming to Shanghai want to find a new apartment. The apartment renting business in China, especially in Shanghai is very crazy. In the last three years, it’s been very easy to get investment from banks. It’s very easy to get money from investors because the market size is so huge. The needs are huge. So, many companies are coming up. Even bigger companies like Alibaba and Jindong are all investing in the apartment renting business in China. The last few years have been crazy. Generally, a lot of companies which are doing rental housing in China are coming up. So, the apartment renting business in China has been very competitive. Many rental companies are looking for good locations for apartments because the industry is very hot.
Matthieu David: I see. So, a lot of companies are looking for the same locations. So, you have to fight to get them. That’s the challenges of doing business in China.
Shiny Cheng: And because we are fighting for the same locations, the price keeps getting higher. I think in the last three years, prices of rental housing in China have almost doubled. When I first started doing this in Jing’ a which happens to be the best location, the rent of rental housing in China was only ¥7,000, but now it’s at least ¥15,000. So, in the last six years, it’s definitely more than doubled. This is because every year, about six million people are looking for apartments.
Matthieu David: So, the difficulty, I believe, is also to negotiate a 10-year contract because you have a 10-year contract with the owner. And you will certainly negotiate an increase in price as well. So, all those kinds of terms will be quite difficult to negotiate with as well.
Shiny Cheng: Yeah. The owners are becoming very smart. So, they don’t want sig for ten years. Now, it’s not easy to find apartments in good locations because while we want a 10-year contract, not many owners are willing to give us such contracts.
Matthieu David: You mentioned regulations as another challenge of doing business in China. We know that you have a very different model from Airbnb. I understand that, but you are in the same space, which is rental housing in China. Actually, you rent places that you don’t own, which I think has a similarity to Airbnb. And we know that Airbnb is facing a lot of challenges of doing business in China in terms of regulations all over the world. They are facing challenges in the US. It’s the same in Europe and, I believe, in China as well. What specifically do you face in terms of challenges of doing business in China in regulations?
Shiny Cheng: In
the beginning, regulations were tough for
us because we always rented a three-bedroom apartment, but there will be just one living room and a bedroom. It was not
legal. But from 2013, government documents said this is legal, which makes my apartment renting business in China open to
everyone. Because our quality meets Airbnb’s standards, I am thinking about
reserving 20% of my apartment rooms for Airbnb business as well because Airbnb has regulation issues in China.
Matthieu David: Because it’s short-term and there are issues with short-term, isn’t it?
Shiny Cheng: And also, I am thinking about having a co-living hotel or building. I am thinking about having one building for that, but there are regulatory issues. It’s easier to do that in Hong Kong than in Shanghai because Hong Kong has a smaller space. However, in China, the regulations are very difficult. Even if you get a hotel, you cannot do co-living apartments inside them. Maybe you can do co-working, but you cannot do co-living. There are so many regulations.
Matthieu David: I see.
Shiny Cheng: I was looking for co-living buildings to invest in, but it’s so hard to find one.
Matthieu David: How do you get informed of the regulations? Do you have a lawyer with you? Do you have someone in your team management in China looking at it or you do it yourself? How do you make sure they are up-to-date and you understand them?
Shiny Cheng: We have our industry group, so we talk about this a lot. We talk about Airbnb, capsule hotels, and different co-living buildings. However, for my kind of apartment renting business in China, we have no regulatory problems. I want to do a different style of co-living, like capsule hotels. While it’s okay in Hong Kong, it isn’t in mainland China.
Matthieu David: For people listening to us, regulatory breaches can totally change the business landscape in China. Some time ago, I saw shops and restaurants closed because they were not authorized to rent out to businesses.
Shiny Cheng: So, I think regulation is a problem for scaling up. My current apartment renting business in China is okay. Everything is okay. I want to do more businesses, but regulations are my challenges of doing business in China.
Matthieu David: When you are starting an apartment renting business in China, you need an investment. Have you gotten any investment so far?
Shiny Cheng: I have not gotten any investment.
Matthieu David: So, you own 100% of the company.
Shiny Cheng: Yeah, 100%. I hope I can give my shares out. It’s better to get partners. Maybe in the future, if I need a roommates’ platform, I would need investment. I would need a Chief Technology Officer (CTO), a Chief Marketing Officer (CMO), and an investor for my platform.
Matthieu David: Maybe, some people listening to us need to reach out to you to become your CTO and CMO. Before we started, you sent a document to me, which actually summarized your challenges of doing business in China and also, what you mentioned as your failure and lesson. In your failures, you mentioned not establishing formal management processes from the start. I understand that it’s important to have processes and training, but when you start, you don’t think about it because you think about the cash flow. You want to make sure that everything is going well. So, is it really a failure from the start? Is it not a failure when you develop it or when you move from 100 to 200 to 300 rooms?
Shiny Cheng: I started my apartment renting business in China at 23, and I didn’t have any management skills from my university. I was studying Mandarin.
Matthieu David: You studied in Hainan, right. You studied on the island of Hainan, as far as I understand. You taught Chinese in Shanghai. You started as a Chinese teacher.
Shiny Cheng: Yes, I started as a Chinese teacher. So, I had been a Chinese teacher for one year. It was my job. So, I didn’t have any entrepreneurship skills, but I wanted to be an entrepreneur while I was at university. I didn’t want to teach. In the University, I always dreamed of being an entrepreneur. So, after university, even when I was a teacher, I was into sales. I was looking for an opportunity to be an entrepreneur. Then I found this opportunity. So, I always wanted to be an entrepreneur, but I didn’t have this kind of skill. I didn’t learn it in school. So, I learned it from my experience. In the first three to four years, people were quitting. There were factions within the team management in China, and people were talking behind each other.
My team management in China was a mess. The culture was not good. The company process was a mess. We didn’t have many SOPs. So, I joined the Entrepreneur Organisation (EO). And then, I met many entrepreneurs. Some had 10 years of experience. Some even had more than 10 years of experience. They were very professional entrepreneurs who were very successful at what they did. So, they shared their management skills and knowledge, and I learned from them. Also, the whole E.O set-up is pretty amazing. I got a lot of training from EO, so I became very, very professional. Then, I started to establish my company culture. These are core values, mission, and vision of my company. I created the environment for my company. And then, I created many SOPs for the management of my company.
Matthieu David: What do you mean by SOP? I am not sure everyone understands what SOP means.
Shiny Cheng: It’s the process for each department. So, I learned it from experience and practice. So, now, everything is going in the right direction.
Matthieu David: Who were the first people that you hired? You said that it was a mess in the first three years. Which functions did you hire first during the first two years? What did you hire them for? Did you hire them to decorate? Did you hire them to take the pictures? For what functions did you hire your salespeople?
Shiny Cheng: Salespeople like the designer, project manager, and the QC.
Matthieu David: Quality Control?
Shiny Cheng: Yeah, Quality Control. I also hired a finance team, service team, cleaners, handymen, and workmen. So, these were the people I hired, but I am not good at management.
Matthieu David: How do you assess you are not good at team management in China?
Shiny Cheng: Because people were quitting and always leaving. This is because the culture of the company was very negative.
Shiny Cheng: They were talking behind each other and complaining. I didn’t hire the right people. Also, the company process was not very organized. Actually, it’s my fault. Everything was my fault because I was not good at managing. In the beginning, I was working from 5 a.m. to 11 p.m. every day. Everything depended on me, and I didn’t know team management in China. So, I fired the whole team management in China, leaving only one person.
Matthieu David: Really? Did you fire everyone except just one person?
Shiny Cheng: Yes, because there was so much negative talk amongst them. So, I fired the whole team management in China.
Matthieu David: When was it?
Shiny Cheng: Four years ago.
Matthieu David: Just before you join EO?
Shiny Cheng: Before joining EO. Later on, after that, I joined the EO. I think it’s very good timing. And then, I started my new team management in China and chose people who had the same values as my company. I chose them very carefully. So, I hired very slowly and fired very fast. If I found they weren’t very good, I fired them very fast. When hiring people, I pay much attention to their values and attitude. I wasn’t paying that much attention to values and attitude earlier. After values and attitude, I look at their skills and experience or performance.
Matthieu David: Interesting.
Shiny Cheng: I also go to many places to learn. I visit the US and many other countries to learn more about entrepreneurship and management.
David: Where did you go?
Shiny Cheng: I just went to Malaysia for a master class.
Matthieu David: With EO?
Shiny Cheng: Yeah, EO as well. Yeah, I have had a lot of training from EO, but I still need to practice more.
Matthieu David: I see. You said the biggest lesson is building culture and vision. You have already talked a little bit about it. Building culture and vision is the most significant change for my company. How did you build that? It’s very easy to wake up each morning and say “This is my vision and my culture,” but it should relate to what your company really is. So how did you build it? Did you build it because it’s what you want to be in 10 years, or it’s the mindset of your team management in China, or it’s because of your own personality? How did you build this culture and vision? How did you define it? So, the key question here is how you defined it.
Shiny Cheng: It’s a very good question. In the beginning, I chose around 3-4 key people in my team management in China, and then we had a meeting together where we worked on the mission, values, and core values of the company. And then I ask the members in team management in China questions like why they joined the company and why they are doing what they are doing every day. So, I will ask them these kinds of questions. Also, I will ask them what’s standing in the way of their success and how they plan to reach this success. So, these are the kind of questions I ask my groups. When they answer these questions, we are then able to define why they are working in the company. For example, if someone is working because they want to share the warmth and love, we get to know the personality of that person beyond apartment renting business in China. Through this, not only are we able to know about their brains but their hearts as well. We are working because we want to share love and warmth. So, we define our mission as sharing love and warmth.
Matthieu David: I understand that. But did you find that it was a common point with all of them or you had very diverse answers? Were the answers similar or they were very diverse, and you had to re-work several times on the values?
Shiny Cheng: It’s called a strategy summit. We hold this meeting every year. Every year, we review our culture and plan for the culture and goal of the following year. Our first core value is gratitude. The second one is proactiveness. The third is to be first before any. So, these are our core values. Thirst for learning is also one of our core values. On Mondays from 9 am to 11 am, we dedicate that time for reading and sharing only. So, we’re really working on our values, and the people can feel that. So, when new staff joins, they can feel the culture.
Matthieu David: Do you do the Monday gatherings with the entire team management in China or it’s in small groups?
Shiny Cheng: Entire team management in China, but we divide them into different groups.
Matthieu David: You divide them into different groups, right? Okay.
Shiny Cheng: Yeah, we divide them into three groups, which are the marketing, product, and service groups. They will then share the reading.
Matthieu David: I see. So, do you have books you suggest? Are they business books or novels?
Shiny Cheng: It could be any book, but they are mostly professional books and also business development books. The manager or any staff can also recommend a book. Sometimes, we also watch a video or listen to the audio. We don’t always read books.
Matthieu David: There’s one question I realize I didn’t ask you about the business model. What kind of contract do you sign with your clients? Is it the same as a typical lease contract in China? Do you pay one month’s deposit and then you pay for rental housing in China every three months? Do you have another system for them?
Shiny Cheng: Usually, they pay one year. The second one is they pay 1.5 deposit and one month rent for per rental housing in China.
Matthieu David: So, they pay month by month, right? Three months by three months.
Shiny Cheng: Yes, every three months.
Matthieu David: I see. So, you have a little bit of cash flow issue on these payment terms. It’s not only about decoration. It’s also about the cash in and cashes out you have. But because the deposit is 1.5 months and you need to pay for the first month, you need three months. So, it’s 2.5 versus three months. So, you still lower the cash flow issue a bit with this deposit. I see. I understand.
Also, you talked to me about your life motto. I’d really be happy if you could talk more about it. Could you explain to us further what your life motto is? It seems that you have invested a lot of energy, time, and thinking in your vision, values, and life motto. So, I’m pretty sure there is a lot behind this. Could you tell us more?
Shiny Cheng: I think this is very powerful. Energy is very powerful because when I was in university, I dreamt about my life today. This was my dream at the university. I grew up in a small village in China.
Matthieu David: Where?
Shiny Cheng: Gansu Province. There is a city called Lintan. After Lintan, there is a smaller city called Heshui. After Heshui comes to a small village which happens to be my hometown, it was very poor when I was living there. My whole family was very poor. Also, my parents left me when I was a child because my father didn’t want to take the responsibility of raising me. He gave me to my grandmother because my mother died when I was 10 months old. My father then married a new wife, and they left me. They almost didn’t take any responsibility towards me. My grandmother was also very poor. For one year, I didn’t have even have fruits. Buying milk and fruits then was very expensive. So, when I was a student in my hometown, I used to watch people who could afford fruits, milk, and everything else and I wanted to be like them. I still remember when my grandmother takes me to the city, and we would take the train. On the train, I was always the kid who couldn’t pay for the ticket, so my grandmother had to put me underneath her seat. All this while, I was watching other children who enjoyed time with their families. They could have snacks anytime they wanted.
During that time, I wanted to have all those, but I couldn’t get anything. It was terrible. And it is for this reason that I really wanted to be an entrepreneur. I really wanted to get what I needed. I felt without. Even in school, I was the poorest. Amongst my classmates, the money I got every month was the lowest. So, I felt very ashamed at that time. So, when I was at university, I already had my dream. I was super certain about my dream of being an entrepreneur. Maybe, I could be a teacher or anything else, but I was 100% sure I wanted to be an entrepreneur. And actually, it’s happening now. I travel around the world. I am free. I can do more apartment renting business in China. There are more opportunities in the future. Comparing then to now, it’s totally different. This is what I imagined when I was a child and also at the university. So, energy is a very powerful thing.
Matthieu David: Do you think your experience as a child living with very little still influences your decision-making? Do you think it influences you as well as not to take any investment but to stay independent and manage cash flow? Do you think it actually influenced positively your way of growing the company? Let me share my experience with you. In my case, I went to middle school in a somewhat deprived area. It enabled me to love people. When I was a student, I was teaching people from those deprived areas to be to gain admission to famous schools. That had a positive impact on my life because I was more generous. And I feel that, actually, that’s what you just said as well. In terms of management, do you think your childhood experience is still influencing you?
Shiny Cheng: Exactly. Every single time. Every second. Yeah. I think that’s also why I am what I am now. My past shaped my present. I’m very ambitious. I want to do more apartment renting business in China. I’ve always wanted to be number one in my industry. I want to be the best. I don’t want to stop. I’ve always hungry for learning and more opportunities. This is because I was very needy during my childhood. Sometimes, I am also insecure. That’s why you said I don’t want investment. I don’t want to rely on someone. I always want to be in control. I am afraid of losing control when there is an investment. So, I think my childhood somewhat influenced this. I am 31 now. Before turning 30, I was always needy. But now, I feel like, actually, love doesn’t come from what I want. Love comes from what I am giving. So now, actually, I have started to change my mindset. I should embrace and accept myself. The most important thing, in the beginning, is giving to people. In my co-living apartments, I really want to give value first and then get the money back. But now, I am practicing more and more of this in my life. Also, I do Yoga and other spiritual activities. I do meditation, as well. So now, I’m starting to learn how to give back.
Matthieu David: What are the next steps for Shinijia and also, yourself?
Shiny Cheng: Next step? A roommates’ platform for finding roommates in China. I have always wanted a platform. It’s very challenging for me. I find technology very interesting. I am learning. I’ve started to learn it. I am also looking at more real estate investments. I have also invested in a small coffee company. I also want to join a startup group. I want to learn how to invest. I would like to invest in some small, innovative, and interesting companies. Yeah.
Matthieu David: I see. Congratulations. I’m very, very impressed. I didn’t know as much of your apartment renting business in China that I do now. I am very impressed by what you did, your personality, and your company. I hope I can interview many more Chinese entrepreneurs like you. I really enjoyed the talk, and I think a lot of people did enjoy it as well.
Shiny Cheng: My voice is not very good.
Matthieu David: The content is perfect. The content is very interesting.
Shiny Cheng: Yeah, I hope you guys can understand my poor English. My Chinglish, actually.
Matthieu David: That’s a great interview. Thank you very much. I hope everyone enjoyed the talk. Bye-bye, everyone.
China paradigm is a China business podcast sponsored by Daxue Consulting where we interview successful entrepreneurs about their businesses in China. You can access all available episodes from the China paradigm Youtube page.
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