Dense, highly populated cities, widespread use of mobile payment apps, and an increasingly frugal consumer population have created the perfect conditions for the sharing economy to flourish in China.
China’s state-run National Information Center projects that the sharing economy will be worth 10% of China’s GDP by 2020, and in recent years huge amounts of investments from venture capital firms have poured into sharing economy startups. This has coincided with China’s economic shift from manufacturing to a more service based economy.
A Different Model for Sharing Platforms
While most Western sharing platforms allow users to share items that other users already own, many Chinese sharing companies own those items themselves and rent them out to consumers. For instance, the company Zhulegeqiu, which translates to “Rent a Ball” allows users to rent basketballs from automated lockers at basketball courts around the country. In 2017, Zhulegeqiu received around $1.4 million in venture investment from a Chinese venture capital firm. The popularity of mobile payment systems and QR codes make micro-payments for sharing transactions quick and simple. For instance, bike sharing services can cost as little as $.07 per ride.
While Western startups like Fat Lama favor one-stop marketplaces for renting all kinds of items, China leans more towards individual sites and sharing platforms for nearly any kind of transaction imaginable. The global sharing economy will continue to grow, and it will be interesting to see how differently the sharing economy develops in countries like China compared to Western countries.