BEIJING: China's rapidly expanding sharing economy takes many forms, as consumers attuned to the concept are targeted by entrepreneurs with apparently improbable ideas that angel investors and venture capital firms are ready to fund.
It remains to be seen how great the need is for a basketball- or umbrella-sharing service, or whether such business ideas are even sustainable – one of the latter services recently reported that most of its 300,000 umbrellas had gone missing within weeks of launch.
But with the sharing economy estimated to be worth 3.45 trillion yuan ($505.4bn) in 2016 and to be growing at 40% a year, the government last month credited it as "a reinvigorating force in China's economic growth" and welcomed its capacity for creating new jobs through new business models.
"Regulations for the sharing economy should be tolerant while prudent," said Premier Li Keqiang, adding that "there is still much yet to be learned about new business models".
That note of caution hasn't stopped investors anxious not to miss out on a big opportunity from throwing money at start-ups sharing everything from smartphone power banks to luxury handbags.
Bike-sharing has grabbed the most coverage: there are more than 30 bike-sharing apps, some of which have expanded overseas, including Mobike and Ofo, the latter now valued at more than $1bn. Brands have experimented with using them for promotions while the time and location data gathered by the apps can potentially be used to tailor advertising.
Several factors are behind the growth of the sharing economy, including a desire for convenience and a preference among younger consumers for spending on experiences rather than products.
"Young people are embracing renting as a way of life instead of possessing things," Emma Zhu, investment director at Innoangel, a Beijing-based fund, told Reuters. "But the sharing model won't work in every situation. In some cases, they're trying to meet genuine demand, while in others they're not."
Underpinning the sharing economy is the widespread use of mobile payment systems which allow transactions – often for very small amounts – to be completed quickly and easily.
Data sourced from South China Morning Post, Reuters, Bloomberg, Asia Times, Advertising Age, State Council of the People's Republic of China; additional content by WARC staff