China’s sharing economy has strong potential to move beyond its current transport focus and embrace other categories, but trust issues will have to be overcome first, according to new research.
Mintel’s China Attitudes Towards Sharing Economy Market Report, based on an online survey of 3,000 people, found that around a third (30%) of urban consumers wanted to only use brand-new products – with the implication that the remaining 70% are open to buying second hand products and renting.
This attitude is already clear in some categories: 91% said they had rented or bought second-hand bicycles/electric bicycles in the past year; 61% had done the same with cars.
After that, the sharing economy idea rather drops off, although at 25% for both books/audio-visual products and digital products like smartphones and cameras, there are clearly segments where there may be promise for the future.
“Largely driven by substantial promotions and subsidies, at the moment high penetration in rental and second-hand businesses is more focused on the transportation industry, including cars and bicycles,” said Scarlett Zhao, Associate Research Analyst, Mintel China.
“But while the sharing economy in China is dominated by transportation, we see this trend slowly extending to knowledge sharing, through books or audio-visual products.
Other product categories like clothes and accessories face a bigger challenge, but consumer thinking around issues like price (59% see affordability as a reason to participate in the sharing economy) and the environment (51% say that they will rent or buy second-hand products as it is good for the environment) suggest that these too may find acceptance.
Zhao added that market rules and regulations need to be further improved to help improve trust and bring people off the sidelines: over two-thirds (67%) of urban Chinese consumers said that product quality is not guaranteed and 63% are afraid of personal information leakage.
And at least half believe there are insufficient background checks on sellers on trading platforms (57%) and are concerned over the lack of government regulations (52%) and dispute resolution processes (50%).
“Moving forward, if the sharing economy is to achieve full market potential then brands will need to take on more responsibility in mitigating these trust issues,” Zhao said.
Mintel’s China Attitudes Towards Sharing Economy Market Report, based on an online survey of 3,000 people, found that around a third (30%) of urban consumers wanted to only use brand-new products – with the implication that the remaining 70% are open to buying second hand products and renting.
This attitude is already clear in some categories: 91% said they had rented or bought second-hand bicycles/electric bicycles in the past year; 61% had done the same with cars.
After that, the sharing economy idea rather drops off, although at 25% for both books/audio-visual products and digital products like smartphones and cameras, there are clearly segments where there may be promise for the future.
“Largely driven by substantial promotions and subsidies, at the moment high penetration in rental and second-hand businesses is more focused on the transportation industry, including cars and bicycles,” said Scarlett Zhao, Associate Research Analyst, Mintel China.
“But while the sharing economy in China is dominated by transportation, we see this trend slowly extending to knowledge sharing, through books or audio-visual products.
Other product categories like clothes and accessories face a bigger challenge, but consumer thinking around issues like price (59% see affordability as a reason to participate in the sharing economy) and the environment (51% say that they will rent or buy second-hand products as it is good for the environment) suggest that these too may find acceptance.
Zhao added that market rules and regulations need to be further improved to help improve trust and bring people off the sidelines: over two-thirds (67%) of urban Chinese consumers said that product quality is not guaranteed and 63% are afraid of personal information leakage.
And at least half believe there are insufficient background checks on sellers on trading platforms (57%) and are concerned over the lack of government regulations (52%) and dispute resolution processes (50%).
“Moving forward, if the sharing economy is to achieve full market potential then brands will need to take on more responsibility in mitigating these trust issues,” Zhao said.
Sourced from Mintel; additional content by WARC staff
