(170722) — BEIJING, July 22, 2017 (Xinhua) — Photo taken on May 29, 2017 shows a person using phone software locating the shared car in Handan district, north China’s Hebei Province. The sharing economy, originated in 1970s in the U.S., is growing rapidly in China and has brought great changes to people’s life providing more economic, verified and convenient services. (Xinhua/Mou Yu) (xzy)
CHINA’S sharing bubble is expanding. A quick scan of a QR code with a smartphone rents you just about anything, from bicycles and cars, to offices and homes.Consumers worldwide show a robust appetite for the so-called sharing economy, and PriceWaterhouseCoopers pinned the platform’s worth at $335 billion in the next decade as travellers opt to rent a spare room on Airbnb or use Uber or Didi Chuxing in China.
The term “sharing economy” was coined in Silicon Valley, where computer coders shared programmes for free.
Investopedia defines the sharing economy as: “An economic model in which individuals are able to borrow or rent assets owned by someone else.” Digital technology, the internet and apps have driven the success of matching services to customers.
China’s sharing economy is thriving and investors are pouring millions into start-ups looking for the next, big consumer hook.
Forbes noted these opportunities were ripe as China’s economy slowed and people were purchasing fewer goods.
It is a boon for the mobile-payment sector, which has been rapidly adopted among the Chinese. Most of the transactions are done through IT giant Tencent’s instant-messaging app WeChat.
According to Beijing-based consultancy Analysis International, mobile payments in China clocked $1.85 trillion last year.
A recent China Sharing Economic Development Report, compiled by the state information centre, said transactions in China’s sharing economic market clocked 345.2 billion renminbi last year, up 103% from 2015. More than 600million people, an increase of 100 million, rented a service.
About 60 million service providers, an increase of 10 million, operate in this sector. The report said in the next three years, the sharing economy would continue to maintain an average annual growth rate of 40% and service providers are expected to exceed 100 million.
Over the next decade, China’s sharing economy is expected to rank among the top 10-performing platforms.
The manufacturing sector, according to the report, has begun to benefit from the economic platform. “The growth of the sharing economy has effectively hedged the slowdown in economic growth and technological progress”, which has put the squeeze on unemployment.
Ke Rong, associate professor at the Institute of Economics’s School of Social Science at Tsinghua University, said China’s attitude towards a sharing economy was “to let it grow and regulate it later”. The country passed one of the world’s first national laws regarding this form of economy last year.
Environmentalists warned that the huge number and variety of items made available for sharing has created urban management problems in Chinese cities. State broadcaster China Global TV Network’s English news channel reported that the bike-sharing industry could generate 300 000 tons of scrap metal in future.
Africa’s economy, demography and digital growth makes it a viable environment for the ideas of the sharing economy. Companies like Uber and Airbnb already operate on the continent.
Global Risk Insights, a publication for political risk news and analysis, said major players in sharing economy view Africa as “the next big, billion-person opportunity” .
The publication said it was not just American companies expanding into Africa, but also China’s Tencent. Namibia was a location for the global roll out of its QQ app – the third-largest social media app in the world after Facebook and WhatsApp.
African companies are looking to claim a piece of the pie. In South Africa, Taxify has secured 10% of SA’s ride-sharing market. Jozibear launched last year in Johannesburg, Cape Town and Durban.
Sceptics dismiss the sharing economy as ephemeral, but some economists believe it’s a welcome stimulus to help jump-start a spluttering global economy; hedging its bets on consumers, especially younger generations.
Peters is the live editor of Weekend Argus. She is on a 10-month scholarship with the China Africa Press Centre.