In China, umbrellas and basketballs join the sharing economy
China may be oversharing. First, a brutal and costly ride-hailing war drove Uber out of the country. Then a boom in bike-sharing blanketed city streets with unused bicycles.
Today, Chinese start-ups want to share umbrellas, concrete mixers and mobile phone power banks. One wants to share basketballs.
As Chinese entrepreneurs and investors pile in, some skeptical industry insiders are wondering: Has China reached “peak sharing?”
“After all these years, China is finally embracing its communist roots,” said Andy Tian, an entrepreneur and cofounder of Asia Innovations Group in Beijing. “That’s the essence of communism: Communal sharing.”
“But there’s no question that it’s a bubble,” he added. “It may have roots in something valuable, but can you really share everything?”
Chinese entrepreneurs like Xu Min think that, quite possibly, you can. In March, the 30-year-old serial entrepreneur from Jiaxing, a town in the eastern Chinese province of Zhejiang, came up with the idea of a basketball-sharing service after he heard some friends complain about the inconvenience of carrying a ball around.
Just four days later, Xu set up Zhulegeqiu, which in Chinese is a pun that roughly means “Rent a Ball.” It lets users rent basketballs from customdesigned automated lockers at basketball courts around the country. To rent a ball, users scan a code on the locker with their smartphone camera, unlocking a compartment holding a basketball.
Zhulegeqiu charges users about one renminbi, or about 15 cents, per hour for rental. A deposit of about $10 is required unless the user has a high rating on Sesame Credit, the social credit scoring system developed by China’s Ant Financial, an affiliate of e-commerce giant Alibaba Group.
“In the long run, it may be more costeffective to buy rather than rent a ball,” Xu said. “But we think Chinese users are willing to pay a little more for convenience.” Earlier this month, Zhulegeqiu received around $1.4 million in venture investment from Modern Capital, a Shanghai-based venture capital firm.
Behind China’s sharing boom is a surplus of money and — some critics say — a shortage of good ideas. “We’re seeing a lot of money bouncing around,” said Zhou Wei, chief executive of XNode, a start-up accelerator and coworking space in Shanghai, “and foolish investments being made.”
In its latest iteration, the sharing economy in China has evolved into something like an internet-enabled rental business. Unlike Airbnb and Uber, which provide a platform that connects users to existing resources, the latest sharing companies in China own the product and rent it out to users.
Didi Chuxing, the ride-sharing company that bought Uber out of China, is a private company and does not disclose its financial results, but its valuation is rising as investors pour in. China also has conditions ripe for sharing, including a huge population, dense cities and a sizable group of people who cannot afford to buy.
“In China, average incomes are still very low and the market in many ways is still very price-conscious,” said Mark Natkin, managing director of the technology research firm Marbridge Consulting. “So if the technology is there to support it and there’s a viable business model, there are all sorts of sharing economy or pseudo-sharing economy businesses that can potentially do very well.”
The Chinese government sees promise in sharing. It estimates sharing last year accounted for $500 billion in transactions, and projected it would account for 10 per cent of China’s economic output by 2020.
All that drives ideas that may seem puzzling to others — including Shen Weiwei’s umbrella-sharing business.
Shen, an entrepreneur, acknowledges that it may be difficult for his start-up, a shared umbrella service called Molisan, to turn a profit. Molisan, which means “Magic Umbrella,” will reap only small profit margins charging one renminbi (15 cents) to rent an umbrella for 12 hours from one of Molisan’s custom-designed kiosks, and customers could end up stealing them.
“Everyone at home has a lot of umbrellas, but we never have them when we really need them,” said Shen. “If we are successful, then users will no longer have to buy umbrellas.”
But Shen said he was confident that others would see the public and environmental benefits of having an umbrella-sharing service. Some companies, like the Shanghai-based Duola, which connects concrete mixers, mixer drivers and construction sites, are more niche and have analogues with similar rental businesses elsewhere.