Returning to the real sharing economy
The “sharing economy” is a real buzzword in China these days. The word pops up so often in presentations and speeches of Chinese entrepreneurs who visit the US, and even just in WeChat conversations that I have with friends and relatives in China. Even though I am living far away from my home country, I feel as if talking about the “sharing economy” has become a new topic of conservation that Chinese use to greet one another – that now rivals the once ubiquitous “chi le ma (have you eaten)?”
The sharing economy was a phrase that gained popularity in Western countries after the turn of the new millennium. It was American companies such as Uber and Airbnb that were the pioneers in exploring the new concept. But soon, the Chinese quickly picked up on the idea and pushed its possibilities much further. Today, in China via your phone, you can share everything from bicycles and basketballs to napping beds and umbrellas.
According to the Sharing Economy Research Center of China’s State Information Center, businesses based on the concept of the sharing economy in 2017 grew into a $500 billion market, more than double the previous year, with 600 million people involved in sharing activities, 100 million more than the previous year, and 60 million people providing services, 10 million more than the previous year. Over the next few years, the sector is expected to maintain a 40 percent annual growth rate and make up 10 percent of China’s GDP by 2020.
This is an achievement that makes many Chinese proud. Cheng Wei, founder and CEO of Didi Chuxing, the Uber-like car sharing service in China, said at the World Internet Conference held at Wuzhen, China this week: “In the past 20 years, Internet companies in China have learned a lot from Silicon Valley. But I believe Silicon Valley will have to look at China now for further development of the sharing economy.”
Indeed, Americans are taking note. A commentary piece by Bloomberg in May exclaimed: “China Could Be the Future of the Sharing Economy.”
But along with all the applause and accolades, China should be aware of one thing, profit is indeed not the best measure for the sharing economy. In an article published by Harvard Business Review in January 2015, Giana M. Eckhardt, professor of marketing at Royal Holloway University of London and Fleura Bardhi, professor of marketing at City University of London, pointed out that the so-called sharing economy should be more accurately called an “access economy.”
“Sharing is a form of social exchange that takes place among people known to each other, without any profit,” they wrote. “When ‘sharing’ is market-mediated – when a company is an intermediary between consumers who don’t know each other – it is no longer sharing at all...it is an economic exchange, and consumers are after utilitarian, rather than social, value.”
Limiting the sharing activities among people who know one another may not be an effective way to realize the social value of any good idea in today’s world. Yet profit generating and data collecting oriented sharing projects are also missing the mark in terms of the concept of real “sharing.”
In the US, it’s not hard to find successful examples of real sharing projects. I’ve visited a thrift shop on Martha’s Vineyard where people drop off stuff they don’t need any more and take whatever they like. I’ve interviewed people who use Time Bank, where people “deposit” and “withdraw” one another’s help based on their own special skills on an hourly basis.
Just last week, I visited The Book Thing of Baltimore, a warehouse where you drop off books you don’t want anymore and take away books you like – for free. The project, run all by volunteers, was kicked off by a book-loving bartender named Russell Wattenberg in 1999. When the warehouse was damaged in a fire last year, donations from businesses, institutions and local people poured in to help revive it.
No one has to pay a cent, donate a book or scan a barcode that inevitably collects your personal information to get a book. The organizers occasionally sell some books to pay for the operational costs. But that’s the only time money is involved.
When I went there, the recently reopened warehouse was positively bustling. People were coming in with boxes of books and others were leaving with boxes of books. Volunteers were helping people locate the books they were after among the thousands on the shelves. It was a lovely sight.
It’s not that China hasn’t attempted to launch such programs before, yet so far, most have failed because users don’t return the shared items, sabotage them or are simply not interested in participating. A library in suburban Beijing had to apologize in the summer for the failure of its book exchange program which allowed people who donate three books to take a book away – many of the donated books were pirate copies or even fakes disguised by glossy covers.
I believe this is only an initial setback for China. Eventually in time, such programs will be able to succeed there. But until then, the thriving sharing economy that China holds dear is missing an integral part.