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In hard times, ‘virtual office’ providers are thriving

17 Jul
Virtual office services are unprecedentedly flourishing. Clients who need to keep up appearances have been flocking to these service providers, even though the virtual rents keep going up.

The traditional office leasing market in Hanoi and HCM City, after absorbing rents decreases of 25-30 percent over 2008, remains in the doldrums. However, the market in ‘virtual offices’ is booming.

A ‘virtual office’ is an office with an area of zero square metres. A customer who leases a virtual office gets a downtown address he can use to register his business and send and receive mail, a fixed telephone line and a fax machine that operates 24/24 hours. Operators answer incoming calls as though they are staff of the client and then forward messages to client’s true location. If the clients need an impressive place to meet business partners or customers, they can use meeting rooms equipped with modern facilities.

It’s an innovative – if somewhat dodgy — solution to the problem of not having an impressive downtown office of one’s own. Clients can contract for lots of additional services, including the use of meeting rooms, photocopiers, printing machines and Internet. They can rely on the virtual office providers to deliver tasteful decorations, stylish receptionists, computer set-ups and even staff to organize a reception or to chauffer guests around the city.

That explains why office buildings have been appearing in downtown areas of Hanoi and Ho Chi Minh City bearing the nameplates of several hundreds of companies.

Clients save both money and face

The economic difficulties of others have proven to be a golden opportunity for virtual office service providers. For many, business turnover has tripled in comparison with pre-crisis period.

Huynh Quang Viet, the vendor of a virtual office system called ‘G-Office,’ says his HCM City City company’s list of clients has doubled since last summer. To attract clients, his company offers free services for three months.

Dinh Minh Chinh, Director of The gioi Tim kiem Company, said that he had 50% more clients early this year than he did twelve months’ earlier. Chinh said that a virtual office costs a client from $50-179 a month, depending on the services contracted.

Also according to Chinh, a client who wants an actual chair and desk, taking up 2.5 square meters, pays 2.9 million dong a month for a ‘fixed seat’ or 900,000 dong for a ‘flexible seat.’ A private room with one to three seats can be had for less than 14 million dong per month.

Most of clients say they use virtual office services to save money. For far less than the $20 to $40 per square metres they’d have to pay each month for conventional office space, they get all the services they need, including the right to use modern equipment, security officers and cleaning.

A director of a real estate company in Hanoi said that normal office fee is too high for businesses facing economic difficulties. Therefore, he decided to lease a virtual office. “We only need to pay $50-120 to see our nameplate hanging over the most modern and fully equipped buildings,” he added happily.

Nguyen Lan Huong, a manager at a travel firm that leases a virtual office at No 34 Hai Ba Trung street in Hanoi, confessed that his firm’s real office is located in a small alley. It’s not a suitable place when the staff need to invite clients to discuss business.

“Our business has become better since we began using the service,” she said.

Source: GD&XH