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Business / Economy

Asia embraces sharing economy

By Cornelia Zou in Hong Kong (China Daily) Updated: 2016-03-22 10:46

In 2012, those few startups in the short-term rental field had a market value of around 140 million yuan. Within two years they had grown to 380 million yuan.

That the sharing economy facilitates more efficient utilization of resources could also help drive innovation, while lowering the risks of entrepreneurship.

But there are myriad challenges. The Chinese committee noted that the sharing economy in China will have to improve by tapping into some kind of system of credit and then overcoming regulatory challenges.

"China's sharing economy is still at the beginning stage, there's still much space for growth," said the report.

In many ways, China is a natural breeding ground for sharing economy companies.

The country has a dire need to better use its resources, which include a massive Internet user base, a traditional culture of frugality and many successful examples of how companies can work to shape the future of the sharing economy. On the downside, a large and well-developed bureaucracy could be holding it back.

There are, however, a lot of gray areas.

For example, the crowdfunding of equity for companies is not yet well-understood on the regulatory side, and this approach also challenges traditional notions of consumption and business. There are still issues around how these new businesses can coexist with other models.

The sharing economy should impact the economy from both the supply and demand side, said Lu Wenyong, CEO of Ewashing, an online personal care services provider.

On the supply side, he said, sharing makes it possible to better use resources. On the demand side, sharing of resources can drive consumption. Ewashing works with more than 700 laundry shops to provide on-demand washing services.

"The relationship between the sharing economy and traditional business operators should be friendly," said Lu.

"They will fuel the development of industries together in the future. The sharing economy can help connect traditional business with the Internet and its users to help promote outstanding enterprises."

Lu added that the sharing economy develops from a personal level to a company level, then to a national level where sharing cities can be built.

"In another 10 years, the sharing economy will go through another revolution and people's lifestyles will be completely changed."

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