Shar­ing econ­omy of­fers chances for growth

China Daily (USA) - - BUSINESS - By GAO JIN’AN Con­tact the writer at gao­jin@ chi­nadaily.com.cn

Dur­ingmy va­ca­tion in­May in Europe, I hadmy first ex­pe­ri­ence of peer-topeer ac­com­mo­da­tion, an im­por­tant com­po­nent of the now trendy shar­ing econ­omy, and found it pretty cozy.

In Bor­deaux, we stayed in a cen­turies-old apart­ment right at the cen­ter of the city, with con­ve­nient ac­cess to its tram sys­tem, while in Madrid, we chose a mod­ern apart­ment near the Aca­cias metro sta­tion. They were all clean, tidy and com­fort­able, and pro­vided us with vir­tu­ally all the ameni­ties that a ho­tel could of­fer.

What re­ally lured us to stay at the pri­vately-owned apart­ments was they are cheaper. For the Bor­deaux room, the charge was 100 eu­ros ($110) per day, and the rate for the Madrid apart­ment was al­most the same, with park­ing fees in­cluded.

With all con­ve­niences and low costs, it is no sur­prise that P2P ac­com­mo­da­tion has de­vel­oped so fast in re­cent years in China and across the world, given the ad­van­tage of the grow­ing in­ter­net and mo­bile in­ter­net pen­e­tra­tion rates.

P2P ac­com­mo­da­tion is a business model in which pri­vate home­own­ers list their idle but fur­nished and de­cently-equipped apart­ments on third-party plat­forms for short­term rental, and through which the own­ers turn their idle prop­erty into money spin­ners and ten­ants can save money while en­joy­ing com­fort­able stays.

A sur­vey, con­ducted by the gov­ern­ment think tank State In­for­ma­tion Cen­ter and the In­ter­net So­ci­ety of China, showed that the size of China’s shar­ing econ­omy amounted to 1.95 tril­lion yuan ($294 bil­lion) in 2015, and about 50 mil­lion peo­ple were in­volved in the business, di­rectly or in­di­rectly, as ser­vice providers. It pre­dicted the shar­ing econ­omy will main­tain a 40 per­cent an­nual growth in the com­ing five years, and its scale is ex­pected to ac­count for 10 per­cent of the coun­try’s GDP by 2020. P2P ac­com­mo­da­tion should con­sti­tute a big chunk.

That’s pretty en­cour­ag­ing.

Con­sid­er­ing the shar­ing econ­omy as part of the so­lu­tion to boost growth and de­velop the ser­vices­driven econ­omy, both the cen­tral and lo­cal gov­ern­ments have thrown their weight be­hind it.

Pre­mier Li Ke­qiang stressed de­vel­op­ing the shar­ing econ­omy in the Govern­men­tWork Re­port ear­lier this year. And in­March, 10 min­istry-level de­part­ments in­clud­ing the Na­tional Development and Re­form Com­mis­sion is­sued guide­lines for en­cour­ag­ing green con­sump­tion, which un­der­scored the development of short-term hous­ing rent and home­s­tay ser­vices.

Airbnb Inc, aUS-based ser­vices provider be­tween home­own­ers and ten­ants, is an ex­am­ple of the suc­cess of peer-to-peer ac­com­mo­da­tion. It now has more than 2 mil­lion list­ings in more than 34,000 cities across the world. This nine-year-old com­pany can now of­fer as many rooms asHil­tonHo­tels & Re­sorts, which has taken about a cen­tury to grow to its cur­rent scale. At the same time, ac­com­mo­da­tion shar­ing is also re­defin­ing the tra­di­tional travel and hos­pi­tal­ity in­dus­try.

And Airbnb’s Chi­nese peers, in­clud­ing Zhubai­jia and Xiaozhu, are catch­ing up quickly and are also cash­ing in on the trend and have reaped their sweet har­vest in the past fewyears while help­ing drive the growth of Chi­nese ac­com­mo­da­tion shar­ing.

For ten­ants like me, how­ever, we need also to con­sider the other side of the coin— risks when de­cid­ing to stay in other peo­ple’s homes, which in­clude safety, hy­giene and dis­pute set­tle­ment.

As the sec­tor grows by leaps and bounds, the gov­ern­ment has to work out rules to reg­u­late the business in or­der to en­sure its sus­tain­able development and a level play­ing for all par­tic­i­pants. Gov­ern­ments have taken no­tice of the prob­lems and are work­ing on them.

Fi­nanceMin­is­ter Lou Ji­wei said in mid-July at the G20 meet­ings of fi­nance min­is­ters and cen­tral bank gover­nors in Chengdu, Sichuan prov­ince, that the gov­ern­ment will work to pro­vide a level play­ing field for the shar­ing econ­omy to en­sure its healthy development and fair com­pe­ti­tion with tra­di­tional play­ers in the sec­tor.

Aftermy first ex­pe­ri­ence of peerto-peer ac­com­mo­da­tion in France and Spain, I’mlook­ing for­ward to try­ing the Chi­nese P2P ac­com­mo­da­tion mar­ket when I travel to other cities some­time soon.

PRO­VIDED TO CHINA DAILY

A ten­ant checks the kitchen in a rental apart­ment in Chengdu, cap­i­tal of Sichuan prov­ince.

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