The Sharing Economy's Primary Early Adopters Are The Chinese
While Airbnb's struggles in China have been well documented as of late, most market forecasters have the company poised to eventually conquer the market. The reason behind these bold predictions have been the Chinese people's willingness to embrace the "sharing" model as a means to rent everything from bicycles to basketballs. The root of this "sharing" explosion is traced to three factors, according to Skift:
"The first is China’s demographic profile. At one end of the spectrum, China’s millennials are the engine for the country’s world-beating e-commerce industry and the sharing economy that’s grown out of it.
"Rather than splurge on a car — or even a phone battery pack — many Chinese youth would prefer to save money for lifestyle experiences such as travel, or to seed their own startups. At the same time, Chinese seniors lack a strong social safety net and are thus dependent upon the support of children and grandchildren. They can also personally remember an earlier, harsher China. Unsurprisingly, they’re by nature more frugal, which makes sharing assets more appealing.
"The second factor is the rapidly changing nature of Chinese consumption. Skeptical about product safety, faced with rising home prices and burdened by the responsibility of caring for those aging parents, middle-class Chinese report they’re becoming more discriminating in how they spend their money. That’s propelling a well-documented shift away from mass-market products toward premium products and services.
"This has a twofold effect. First, money that might have been spent on, say, a car, is instead saved by ride-sharing and applied to other, premium purchases. Second, sharing enables access to premium experiences — say, via a very good home share during a vacation. Interestingly, this trend parallels the growth of a rich, e-commerce based trade in secondhand goods (in effect, long-term sharing businesses), including luxury items like Gucci handbags.
"The third and most important factor is the Chinese consumer’s embrace of mobile payment systems such Alibaba Group Holding Ltd.’s AliPay and Apple Inc.’s ApplePay. Chinese mobile-based payments were 50 times greater than those in the U.S. in 2016. These days, it’s commonplace to see Chinese consumers waving their phones in front of a payment terminal, or scanning a QR code to complete a transaction which, in many cases, might be for a very small sum. (A typical Chinese bike-share requires payments that range from $0.07 to $0.14 per 30-minute ride.) Little wonder that some investors might think that an umbrella-sharing service could be viable.
"This welcoming climate means many of the world’s innovations in sharing businesses may start coming out of China, rather than Silicon Valley."