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Eight reasons likely to fuel China’s sharing economy
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“NOTHING is yours. It is to use. It is to share. If you will not share it, you cannot use it,” said Ursual K. Le Guin in “The Dispossessed,” a novel depicting a society where all goods are held in common.
The Chinese seem to have taken this particular idea to heart. Several recent reports portray a very rosy picture of the future of sharing economy in China.
According to the China Sharing Economy Development Report from the National Information Center, the value of shared goods and services is expected to account for 10 percent of China’s GDP by 2020, with an annual expected growth rate of 40 percent per annum.
Are there any factors that make the Chinese more favorably disposed to the concept of “sharing” than other cultures and groups? I can list at least eight of these, which are rooted in Chinese socio-economic and cultural peculiarities.
1. Sharing makes financial sense.
While China may be the second-largest economy in the world, it still ranks somewhere around 100th in terms of GDP per capita. The latest data from statistics authorities suggests that the per capita disposable income in urban China in 2015 was around US$4,800 per annum. With relatively modest incomes but high aspirations, Chinese consumers love a good bargain, even when they are shopping for luxury products or going abroad on holidays. Airbnb (and China’s own Tujia) surely offers cheaper accommodation than similar quality hotel fare.
2. Chinese are entrepreneurial.
If there was money to be made by spinning a venture, investing in the stock market or moonlighting by opening a shop on Taobao, the opportunity was embraced. Hence when tourists are rushing to China, and Chinese landlords see potential for making some money on the side, they are easily seduced. Why not give the apartment for rent for the weekend, when you are leaving town to visit your parents? Or why not let someone drive your car (even if it is your treasured BMW) or take it for a spin yourself and make an extra buck by ferrying people to and from the airport?
3. China has low penetration of many things that people want to own or use.
While the automobile market in China has been having a dream run that has never been seen before (except for cooling down to less than 5 percent growth in 2015) there are still around only 170 million cars for 1.3 billion people. Surely the over one billion car-less Chinese also have aspirations to ride in comfort and if sharing makes their desire easier to fulfill, sharing has a definite role.
4. Sharing is social.
It’s been said that man is a social animal, and the Chinese demonstrate this with gusto. Unlike in many other parts of the world, all media is “social media” in China. Sharing offers opportunities for social interaction with other users, as well as owners, who are people like you and not commercial purveyors of goods and services. This has intrinsic appeal to the Chinese.
5. China’s ageing population will make it more pre-disposed to sharing.
About 222 million Chinese are 60 years-of-age or older. China’s cities and villages are full of empty nests, with single children flown away to make their fortunes in other corners of the country — or the world. This leads to empty spaces in the house as well as more spare time for the owners of the house. Both of these are conducive to offering sharing services.
6. China’s ease with digital makes sharing easier.
China has more internet users than the total population of the developed world. These users’ heavy reliance and deep attachment with the Internet is well known. Not only that, Chinese netizens use mobile phones to access the Internet and are deeply engaged with social media. This ability to tap into the digital world offers a perfect tool to participate in the sharing economy.
7. China has many empty houses bought as investment.
Lack of lucrative investment options, and high appreciation of property prices has resulted in many urban Chinese buying multiple apartments. Attracting tourists to these apartments is an obvious route to increase the return on property.
8. The government supports this.
The sharing economy is considered a part of the Internet Plus strategy, which attempts to help more traditional businesses benefit from the power of the Internet.
These factors collectively mean that China will be at the forefront of the “sharing” revolution. This also means that “sharing” in China will go beyond the traditional areas of transportation and tourism. It was seen on Taobao (the largest Chinese online e-commerce platform) that some Chinese women were advertising “spare husbands” over the Chinese New year holiday for young unmarried women to take home in the guise of boyfriends, to assuage parental concerns about their daughters’ marital prospects and plans.
Ashok Sethi is the APAC regional head for Brand and Customer research for GfK.
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