China doesn’t have an oversharing problem, but it might have an over-renting problem.
The practice of slapping the term “sharing” on a new business in China has become widespread in an economy that is flooded with venture capital for sharing startups. But many of these firms are barely borrowing from the principles that first shaped the sharing economy.
The models are very different from, say, an Uber, where the business doesn’t own the cars on its platform but helps people coordinate online with other individuals to get rides.
Instead, the businesses both build the online platform and make or buy the products available through them—making them basically traditional renting businesses, even when they work via apps. “They are no longer sharing economy,” argued a piece from the Chinese media outlet Jiemian in May. Since product supply is directly controlled by the companies, Jiemian said, “to be more precise, business like these should be classified as renting-by-time.”
Here’s a closer look at some of the models—and how we ought to think about them.
Bike sharing
Also known as: bike rental. See: “Boris bikes“
Over the past few months, many Chinese residents of big cities like Beijing and Shanghai have been able to find yellow-and-orange bikes on the streets. Pedestrians looking for a lift can open their smartphones, unlock a bike parked nearby, hop on for a ride, and pay a fee—one that is often cheaper than for public transportation—once they arrive at their destination. The two leading companies, Ofo and Mobikes, have received hundreds of millions of dollars of venture investment in founding rounds.
Since then, massive number of bikes have occupied street space. They’re sometimes left or disposed off improperly—creating urban management problems in Chinese cities. On July 10, CGTN, the English news channel of state broadcaster, reported that the bike-sharing industry could generate 300,000 metric tons of scrap metals in the future.
Now that China has enough, the bikes are flooding into foreign grounds like Singapore, San Francisco, and London, where the government-backed Santander Cycles program also provides more than 11,500 bikes around the city.
Clothes sharing
Also known as: clothes rental. See: Rent the Runway
Duolayimeng, the Beijing-based clothes-sharing startup which owns over 500,000 garments, describes itself as “the biggest fashion sharing platform” (link in Chinese) in China. It received $12 million in early-stage investment on March 1. To make sure the clothes are clean before being sent out again, the company has its own washing center, said (link in Chinese) the founder Liang Liang.
The clothes they make available would typically cost from 600 to 1,000 yuan ($148) per garment—one-fifth of the monthly salary of Duolayimeng’s target users, white-collar female workers who earn $740 or less a month. Users pay $44 (link in Chinese) for unlimited clothes rental every month.
It’s a similar take to high-end clothes renting businesses, such as Rent the Runway, in the US. There, users pay $139 for unlimited clothes and accessories every month from over 450 designer brands such as Tory Burch and Kate Spade from ordering via the company’s app.
Duolayimeng did not respond to a comment request from Quartz.
Umbrella sharing
Also known as: picking up an unclaimed umbrella at a restaurant, or borrowing one from a friend
Sharing E Umbrella, an umbrella-sharing startup launched in April, recently announced it had lost 300,000 umbrellas, even though they were equipped with GPS. The company’s founder Zhao Shuping said he was not surprised, because “all the umbrellas were taken home by people.”
Despite the massive loss, the company is still looking to put more into the market. It has started manufacturing umbrellas with night lights, according to Zhao. The new umbrella’s deposit fee will be around $4.3, compared to the first generation’s $2.8. After scanning a QR code on the umbrella, users receive a password to unlock it. It costs around $0.07 per hour to use an umbrella.
The whole world has been umbrella-sharing for ages—we’ve just been doing it spontaneously, and for free. Owning an umbrella is also not as expensive as owning a car. Sure, you might want to rent one if it starts raining, but renting is unlikely to replace umbrella ownership in the long run.
Portable phone-chargers
Also known as: it’s almost impossible that someone in China isn’t carrying a portable phone battery, or someone close by doesn’t have one so you should never have to pay for this
In a country with 1.4 billion population, some are trying to help power the sharing economy by lending users portable phone chargers. There are over 15 businesses based on the idea, and they’ve received over 300 million yuan ($44.4 million) in investments, according to (link in Chines) state-owned newspaper The Beijing News in April.
After scanning a QR code, users can borrow them for for a fee of $0.15 per hour after a free period of half an hour or one hour, depending on the company. Users return the portable chargers, embedded with GPS tracking, to designated stations. Meanwhile, it’s possible to buy a portable charger for under $12 (link in Chinese) on Tmall, one of China’s largest e-commerce platforms, owned by Alibaba.
Basketballs
Also known as: sports equipment rental
For just around $0.30 an hour, a student in Beijing can rent a basketball from a vending machine by scanning a code on a locker near the court—a service enabled by Zhulegeqiu, or “rent a ball.” The deposit is around $4.3. The founder, Xu Min, who plans to put the machines across 23 Chinese cities, described (link in Chinese) the idea as “first a charitable project” that benefits sports lovers. He said he was “open-minded” about short-term profits. The team received (registration required) nearly $1.5 million in venture capital in May.
Zhulegeqiu did not respond to a comment request from Quartz.
Tissues
Also known as: there is no such thing as sharing or renting tissues
It is uncommon in China to find free tissues or toilet paper in public areas, which can be a hassle sometimes. But a city in China’s southern Guangdong province has been giving people free tissues since May—and it also belongs to sharing economy, according to Zheng Pin, the local businessman in Zhongshan who started the idea.
Users firstly need to locate ZHO’s GPS-embedded tissue-sharing machines through a public account on social messaging app WeChat. Then users can scan the QR code on the machine, and get one pack of tissue from vending machines free a day. Over 400 facilities like shops, restaurants, and hospitals have introduced the machines. People have to pay $0.07 for a second pack of tissue, i.e. buy them.
The company ultimately hopes to (link in Chinese) attract advertisements and make money by selling water through the machines.
ZHO did not respond to Quartz’s queries.
Napping pods
Also known as: hourly hotel
Taking an hour-long break, which usually involves a nap, is a common practice at many Chinese companies. The Beijing-based startup Xiangshui Space, or “enjoy your sleep,” spotted a business opportunity in the tradition. In June (link in Chinese), the company introduced sharing capsules in Beijing’s technology startup hub, Zhongguancun. Through scanning the QR code, the user can enter the 2.1-meter (6.9-foot) long, 0.9-meter wide capsule. The capsule has air conditioning, a reading light, and disposable bedding. Around noon, its busiest time, the company charges users $1.50 for half an hour.
However, Beijing police shut down (link in Chinese) all the capsules last Friday (July 21) because of concerns the capsules, which don’t require ID cards to be used, could become hiding places for criminal suspects, as well as fire hazards due to crowding.
The idea is similar capsule hotels, which are widely found in places like Japan. China’s sharing capsules are basically the kinds of low-end services you see in the traditional economy, although billed as part of the sharing economy, said Liang Haiming, chief economist of China Silk Road iValley Research Institute, a Guangzhou-based think tank (link in Chinese).
The fundamental principle of the sharing economy is to circulate stuff people already own but only use some of the time. Or, as Liang puts it, to “create value by exchanging idle resources and benefit the wider public.” Instead, the concept “has been abused for anything that is out there for renting,” said Liang.