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May 8, 2017

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Home » Opinion » Chinese Views

After bike rental, will we now start sharing our smartphone chargers?

JUST as bike-sharing companies are busy crossing swords in the cut-throat bikes-for-rent market, a question looms on China’s robust start-up scene: What’s the next big thing after shared bikes?

In light of the recent developments in the high-tech sector, the answer seems to be increasingly clear: shared chargers for smartphones.

Despite the tremendous benefits brought about by massive smartphone ownership — expected to reach 672 million units in China this year — the irritating problem of low battery life appears to be something we have to live with.

The proliferation of power-intensive apps means that an average user may charge his or her handset once or twice a day.

The problem becomes even more agonizing when we are on the go and have no access to a charger or a power bank. Important calls or messages sometimes get missed.

Aware of the market potential, start-up companies such as Xiaodian, Laidian and Hi-dian have sprung up to supply power banks for rent or desktop charging services.

One can either borrow a power bank and return it at a place indicated in the user’s manual or charge their phones using a desktop charger installed in some restaurants or coffeehouses. The service is accessed through mobile apps, which calculate the fees to be paid — the standard rate is half a yuan for 30 minutes or less.

According to media reports, China’s shared-charging industry has attracted a total of 300 million yuan (US44 million) in venture capital and private equity funding within 10 days in April.

Niche market?

Optimistic market watchers thus forecast the new service will grow into a market worth billions of yuan.

However, although few would cast doubt on the assumption that charging our phones is a “rigid demand,” there is less of a consensus when it comes to the question of whether the demand for shared chargers is similarly rigid.

Indeed, critics point to ample alternatives to shared charging. If we carry a power bank or a charger, we can plug our phones into a free charge base available, and such services simply become redundant.

This criticism is shared by quite a few observers, among whom Zhang Jun counts himself.

As a frequent contributor to media focusing on China’s start-up business community like Huxiu, 36Kr and Tmtpost, Zhang argues that the shared-charging service, catering to those without access to a power bank or a charger, is actually a niche market.

Therefore, its potential is heavily dependent on penetration of the charging devices, he said during a live-streamed debate held at If Geek Space, a start-up incubator headquartered in Changning District.

Indeed, low penetration may severely curb the availability of the service. Besides, it doesn’t take a genius to see the paradox. To access the service, one needs to first check on his or her phone the location of the nearest commercial establishment that provides desktop chargers. But with batteries already running low, this may not be possible.

Moreover, Zhang noted that if customers only charge their phones and don’t spend more money — buy a cup of coffee or order some food, for instance — there is little incentive on the part of business proprietors to accommodate such services.

With so many restrictions, the shared charging industry has yet to work out a viable business model that appeals to both customers, partners and investors, said Zhang.

Yang Lie, however, differed.

As the Shanghai marketing director of Proginn, a platform linking up experienced programmers and cash-strapped start-ups, he observed that shared charging is meant for a specific desperate situation rather than general occasions.

Still in his early 30s, Yang exuded the aura of an orator as he countered Zhang’s logic by mentioning the embarrassing situation many will likely encounter: “If I leave my power bank at home, if I forget to charge it, and if I don’t carry a charging cable, how can I cope? That’s where shared chargers come in

“Under these circumstances, shared charging is a rigid demand, period,” said Yang, who also works as a coach for college debate enthusiasts in a university in Zhejiang Province.

He added that usually it takes half an hour to charge a phone’s battery from 10 percent to 60 percent full, which is enough to handle normal tasks.

Making use of fragmented time

Wang Liang, founder and CEO of Shenzhen-based start-up Xiaochong Technology, said in his speech that the shared-charging service actually represents efficient use of our fragmented time.

“Suppose our phone batteries are 50 percent full, and we are sitting around in a coffee shop, waiting for a friend perhaps, and there is this fairly easy-to-use desktop charging device at hand, what harm will it do to just try it out for only half a yuan?” Wang asked.

And this is the reason he believes his model — featuring desktop chargers installed in commercial establishments — is superior to the one built on rental of power banks.

Wang is convinced that his desktop model will save customers the time and trouble to borrow and return the power bank at a certain place (the pick-up and drop-off points may be different, though.)

And thanks to his connections and offline resources, he is confident of expanding the accessibility of Xiaochong’s service to cover as many restaurants and coffeehouses in the Yangtze and Pearl River Delta regions as possible.

Although his company is a latecomer to the market, Wang believes his approach will “help it catch up with the front-runners.”

Zhang, who is less upbeat about the prospect of shared charging, pointed out that shared-charger companies would have to address a thorny issue if their business were to thrive, and that is the price-to-rental ratio.

Unlike shared bikes, which normally cost several hundred yuan to build yet only half a yuan for a ride lasting less than 30 minutes, a power bank is often no more than 100 yuan in value. One doesn’t have to be good at math to see that it makes better economic sense to remember bringing one’s own power bank to work than to repeatedly pay for something one can get for free.

Passing the ‘pain point’

The threat posed by technological advances cannot be ignored either. With wireless charging stations becoming a real possibility — and reality in some countries — and the batteries for future generations of smartphones built to last longer, one cannot but be skeptical about the viability of shared charging, said Zhang.

“When that happens, the so-called ‘pain points’ that drive the market may not be so painful anymore, which will fundamentally undermine the rationale for using the service,” he added.

Watching these talented and energetic young men engage in a fierce yet friendly exchange of opinions, I was reminded of the long way sharing economy has come in China. First it was Didi, Uber, Airbnb, then bike rental schemes like Mobike and ofo came along, now the frenzy of the sharing economy has further spread to unlikely corners, like a prairie fire, and no one knows how much longer it will rage on or when it will die down.

One thing I’m more certain about is that in the immense Chinese market, sharing economy is all the rage and let us brace ourselves for more ingenious innovations along the way.


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