Shared econ­omy branches out

There are still some glitches, but ex­perts voice op­ti­mism

China Daily (Hong Kong) - - FRONT PAGE - By OUYANG SHIJIA in Bei­jing and WANG YING in Shang­hai

Smart­phone run out of bat­tery? Need some fancy dresses to at­tend a wed­ding or a drink­ing party?

The shar­ing econ­omy, al­ready buoyed by the suc­cess of ride-hail­ing and bike-shar­ing giants such as Didi Chu- xing and Ofo Inc, can help.

These and other ser­vices are part of a broader sharinge­con­omy boom sweep­ing across China. Fu­eled by for­ward-think­ing in­vestors and ven­ture cap­i­tal firms, star­tups pop up across the coun­try to of­fer a wide range of shar­ing ser­vices, ex­tend­ing into far more busi­nesses than their for­eign coun­ter­parts do.

Bi­cy­cles, homes, pricey fash­ion, ev­ery­day cloth­ing, bas­ket­balls, um­brel­las ... all are be­ing hurled into the mag­i­cal shar­ing model in China.

Ac­cord­ing to a re­port jointly re­leased by the State In­for­ma­tion Cen­ter and the In­ter­net

So­ci­ety of China, the coun­try’s shar­ing econ­omy trans­ac­tions were worth about 3.45 tril­lion yuan ($510 bil­lion) last year. And it is ex­pected to grow to more than 10 per­cent of China’s gross do­mes­tic prod­uct by 2020. China’s GDP was 74.41 tril­lion yuan in 2016 and is pro­jected to grow by 6 to 7 per­cent an­nu­ally over the next few years.

“I be­lieve the mar­ket for the shar­ing econ­omy will be huge,” said Liu Mengyuan, who founded to pro­vide sub­scrip­tion-based rental cloth­ing ser­vices, in­clud­ing ev­ery­day cloth­ing and high­end lux­ury dresses, for women in China. “So huge even the cloth­ing rental sales will ex­ceed 1 tril­lion yuan in the fore­see­able fu­ture. And China’s large pop­u­la­tion is a big op­por­tu­nity for us.”

Founded in 2015, Yi23 of­fers users more than 200 brands and dif­fer­ent sub­scrip­tion plans. For ex­am­ple, pay­ing 499 yuan a month, con­sumers can rent three items at a time.

The plat­form serves more than 100 cities in China, and has over 4 mil­lion reg­is­tered mem­bers. They can keep the rented cloth­ing items as long as they want, and then ship them back for free and or­der new ones.

Prob­lems spring up

Yet shar­ing ser­vices do have some lim­i­ta­tions.

One in­no­va­tion, “shared sleep­ing cap­sules” in of­fice build­ings in Bei­jing, Shang­hai and Chengdu, Sichuan prov­ince — which of­fice work­ers could rent for a nap dur­ing their lunchtime breaks — were shut down and dis­man­tled last week over fire-safety con­cerns.

For around 10 yuan per half-hour, sleepy white-col­lar work­ers were able to rent white cap­sules in the of­fice build­ings for a nap dur­ing the mid­day rush.

Be­gin­ning in May, the sleek white cap­sules, which look like space pods, were rolled out in of­fice build­ings in the three cities.

Cus­tomers were able to scan a quick re­sponse code with smart­phones, which they could use to pay for the ser­vice, and then ac­cess ser­vices such as phone charg­ers and Wi-Fi.

Dai Jian­gong, founder and CEO of the Bei­jing Xiang­shui Tech­nol­ogy Corp, a startup ded­i­cated to pro­vide the nap space, said the cap­sule ac­tu­ally catered to pro­fes­sion­als’ needs for naps dur­ing a busy work­day.

“In China more than 300 mil­lion peo­ple are sleep-de­prived,” he said. “Those sleepy white-col­lar work­ers need naps to make up for ear­ly­morn­ing com­mutes and long work hours. Usu­ally af­ter a lit­tle nap, they feel more alert and can do bet­ter jobs. And that’s ex­actly what we of­fer­pri­vate spa­ces for nec­es­sary naps.”

Though the pods were re­called, the com­pany was not fined and plans to rein­tro­duce them.

Dai told China Daily the com­pany has re­called all 50 nap cap­sules in the three cities and then will im­prove the prod­ucts ac­cord­ingly to bet­ter serve cus­tomers. And he ex­pects to roll out new ver­sions by the end of this year.

Pay ser­vices aid trend

The suc­cess of the shar­ing econ­omy in China is per­haps un­sur­pris­ing when you con­sider Chi­nese con­sumer’s em­brace of mo­bile pay­ment ser­vices such as Alibaba Group Hold­ing Ltd’s Ali­pay and Ten­cent Hold­ings Ltd’s WeChat Wal­let and their rapidly chang­ing con­sump­tion habits.

“With an in­crease of aver- age in­come, more Chi­nese will pre­fer to pur­chase premium prod­ucts and ser­vices, which has cre­ated niche mar­ket for providers. Mean­while, the ac­cu­mu­la­tion of for­tune and abun­dant ma­te­ri­als en­ables the trend to share re­sources, such as ride-hail­ing re­sources and ac­com­mo­da­tions ser­vices,” said Chen Ke, part­ner and vice pres­i­dent of Roland Berger Greater China.

Chen added that in China, the shar­ing econ­omy not only re­duces the waste of idle re­sources, it also em­ploys new tech­nolo­gies to trans­form tra­di­tional busi­nesses, such as bike rental and shared um­brel­las.

“The ex­panded mean­ing of shar­ing econ­omy in China helps com­pa­nies build a strength amid fierce com­pe­ti­tion and helps more con­sumers to bet­ter ac­cess the needed ser­vices,” Chen said.

While a large num­ber of mo­bile-savvy Chi­nese be­come ob­sessed in the prod­ucts and ser­vices en­abled by the shar­ing econ­omy, some crit­ics ques­tion whether the mode is sus­tain­able. Or, whether all prod­ucts can be share­able?

Ac­cord­ing to the Shang­hai-based, the in­vestor of a shared-um­brella en­ter­prise claimed that of the nearly 300,000 um­brel­las their com­pany de­ployed in more than 10 cities in south­east China, one can hardly be found.

“Yes, I’ve no­ticed me­dia re­ports about the great amount of miss­ing shared um­brel­las in cities in­clud­ing Shang­hai. It’s pos­si­ble for peo­ple to take the um­brel­las home in­stead of re­turn­ing, but I would like to re­gard the ac­tiv­ity as free pro­mo­tion of our project be­cause the um­brel­las are printed with our logo and in­for­ma­tion,” said Lu Hang, who had placed 20,000 um­brel­las in Shang- hai’s down­town ar­eas

Lu, 29, said he had long been en­cour­aged by the suc­cess and pop­u­lar­ity of the shared econ­omy, and a month ago he fi­nally de­cided to launch his shared um­brel­las project in Shang­hai. He said he is op­ti­mistic about break­ing even in the fore­see­able fu­ture.

Not ev­ery­thing share­able

Zhang Xu, an an­a­lyst at Bei­jing-based con­sul­tancy Analysys, said the shar­ing model would not work in ev­ery sit­u­a­tion.

“Shar­ing star­tups need to con­sider how to ac­tu­ally meet con­sumers’ needs and then to share suit­able items. And they also need to con­sider the main­te­nance. For ex­am­ple, if most shared um­brel­las are taken away by con­sumers and can’t be tracked back, the shar­ing mode would be not sus­tain­able,” he said.

How­ever, Luo Xiaoyu, chief ex­ec­u­tive of Xie Bao As­so­ci­a­tion of E-Com­merce Ltd, to which Lu’s shared um­brella project is af­fil­i­ated, takes a rosy view of the fore­see­able fu­ture of shared um­brel­las. Ac­cord­ing to Luo, they are work­ing to im­prove the lock­ing sys­tem and make the project easy to go.

“As Chi­nese peo­ple be­come rich, they tend to buy more stuff than what they need, and this is a huge waste. So why don’t we share things and make the most use of items?” Luo said.

Luo looks to build a plat­form on which peo­ple can share all kinds of goods. “It could be an um­brella, a copy ma­chine, or even a wed­ding gown,” he added.


Cus­tomers use mo­bile phone charg­ers in a restau­rant in Shang­hai last month. This is a grow­ing part of China’s shared econ­omy.

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