Sharing economy to grow further

Growing segment: Bike sharing firms are among those flourishing in the sharing economy era in china. — Bloomberg

CHINA’S shar­ing econ­omy mar­ket will main­tain an an­nual growth rate of over 30% in the next three years, thanks to the pub­lic’s ac­tive par­tic­i­pa­tion, gov­ern­ment’s pol­icy sup­port and ma­ture busi­ness mode, a new re­port said.

The re­port, re­leased re­cently by the Shar­ing Economy Re­search Cen­ter un­der the State Informa­tion Cen­ter, showed that in 2018, the transac­tion vol­ume of China’s shar­ing econ­omy mar­ket reached 2.94 tril­lion yuan (US$437.5bil), up 41.6% on an an­nual ba­sis.

There were 5.98 mil­lion em­ploy­ees reg­is­tered on shar­ing econ­omy plat­forms, up 7.5% year-on-year. A to­tal of 760 mil­lion peo­ple par­tic­i­pated in the sector, of which 75 mil­lion were ser­vice providers, up 7.1% from the pre­vi­ous year.

“China’s shar­ing econ­omy mar­ket and the employment in the sec­tor wit­nessed rapid growth de­spite ris­ing macroe­co­nomic down­ward pressure,” said Yu Fengxia, deputy di­rec­tor of the Shar­ing Econ­omy Re­search Cen­ter.

In­vest­ment into the coun­try’s shar­ing econ­omy sector dropped 23.2% year-on-year to 149 bil­lion yuan, mostly due to ra­tio­nal in­vest­ment pat­terns amid fierce com­pe­ti­tion in the ride-shar­ing sec­tor.

The re­port also showed that uni­corn com­pa­nies in the shar­ing econ­omy sec­tor were ex­pand­ing rapidly. In 2018, 11 shar­ing econ­omy com­pa­nies turned into uni­corns.

In ad­di­tion, as pointed out by the re­port, the sharing econ­omy is help­ing trans­form the ser­vices in­dus­try. By in­tro­duc­ing the shar­ing econ­omy, the structure of the ser­vices in­dus­try is con­stantly being op­ti­mised, and its scale is ex­pand­ing more rapidly.

From 2015 to 2018, the shar­ing econ­omy contributed 1.6%, 2.1% and 1.6%, re­spec­tively, to the growth of the travel, accommodation and catering industries.

The pen­e­tra­tion rate of shared ser­vices also increased. By June 2018, there were 570 mil­lion con­sumers mak­ing on­line pay­ments, 260 mil­lion more than the level of 2015, and the an­nual growth rate reached 16.9%. The pen­e­tra­tion of shared ser­vices among ne­ti­zens in­creased from 46.9% in 2015 to 71% in 2018, sta­tis­tics from China In­ter­net Net­work In­for­ma­tion Cen­ter showed.

“We are liv­ing in a so­ci­ety which con­stantly pursues ef­fi­ciency im­prove­ment. Re­sources that are not fully uti­lised give birth to the shar­ing economy. I am con­fi­dent that as the shar­ing economy pen­e­trates into more and more industries, it will cre­ate great value for our so­ci­ety,” said Li Xiao, found­ing part­ner of Joy Cap­i­tal.

Apart from its role in the ser­vice in­dus­try, the sharing econ­omy con­trib­utes to em­ploy­ment and con­sump­tion.

Zhao Dawei, di­rec­tor of the re­search cen­tre un­der Bei­jing-based on-de­mand ser­vices gi­ant Meituan Dian­ping, said food de­liv­ery ser­vices, as part of the shar­ing econ­omy sec­tor, have boosted employment in the coun­try.

“Take Meituan Waimai as an ex­am­ple. A to­tal of 2.7 mil­lion em­ploy­ers earned money from the platform in 2018, 22.7% higher than the pre­vi­ous year. There are over 600,000 ac­tive de­liv­ery drivers ev­ery day,” Zhao said, re­fer­ring to Meituan Dian­ping’s food de­liv­ery op­er­a­tion.

Yu of the Shar­ing Econ­omy Re­search Cen­ter said the shar­ing econ­omy will con­tinue to sta­bi­lise and pro­mote em­ploy­ment.

“As flex­i­ble work­ers, more and more peo­ple are able to par­tic­i­pate in shar­ing econ­omy ac­tiv­i­ties, ac­cord­ing to their in­ter­est, tech­nique, time and resources.

“Also, the shar­ing econ­omy’s po­ten­tial of stimulating con­sump­tion will be re­leased, as it can not only sat­isfy con­sumers’ needs lim­ited by the tra­di­tional ser­vice mode, but also boost their new con­sump­tion needs. As peo­ple’s con­sump­tion concepts change, shared ser­vices will pen­e­trate into peo­ple’s major fields of life, and serve as the main driv­ing force to fuel con­sump­tion,” Yu said.

As promis­ing as this is, chal­lenges still re­main. For ex­am­ple, the su­per­vi­sion mech­a­nism should be updated, the gov­ern­ment and en­ter­prises should in­crease the level of data shar­ing, and en­ter­prises in the shar­ing econ­omy sec­tor should bet­ter ful­fill their cor­po­rate so­cial re­spon­si­bil­ity. — China Daily/ANN