China has become a world leader in on-demand services — which are often described as comprising the “sharing economy,” although internet-enabled rental is a more accurate way to describe it. Chinese companies have excelled and innovated in the on-demand economy:
- Bike-sharing companies like Mobike and Ofo abandoned the European and American model of offering bicycles at fixed stations, instead allowing riders to use smartphones to pick and leave bikes anywhere they want.
- Didi Chuxing, the ride-hailing company that ate Uber alive in China, was initially focused on connecting passengers to licensed taxi drivers, a key difference from Uber, which allowed the Chinese company to scale rapidly without causing too much outright hostility from taxi drivers and taxi companies.
- Airbnb’s biggest Chinese rival, Tujia, has tailored its offering to Chinese preferences and seems to be growing a market that many thought would not develop in a country where home sharing has little cultural appeal — see this Q&A with company co-founder Melissa Yang 杨孟彤.
- Chinese startups are providing everything from cell phone chargers to umbrellas and basketballs on demand to a smartphone-addicted population that has cashed up mobile wallets — see this SupChina video or this roundup of industry facts for more on the on-demand boom.
But like any gold rush, some of the prospectors are going bust:
In June, Wukong Bicycle, a Chongqing-based on-demand bicycle startup, announced its closure after nine months in business. It said that during its short-lived operation, 90 percent of its bikes were presumed lost or stolen, and the company had lost 1 million yuan ($147,000).
Now a company called E Umbrella Sharing (共享e伞 gòngxiǎng E sǎn), which operates on-demand umbrella networks in 11 cities, including Shanghai, might close operations in Nanchang, Jiangxi Province, after 30,000 umbrellas placed in the city disappeared within a month of being placed there, according to Southern Metropolis Daily (in Chinese).
Similar to on-demand bikes, users can access the umbrellas by downloading a mobile app and scanning the QR code on the umbrella. In Nanchang, the company required a deposit of 19 yuan ($2.80), and a fee of 0.50 yuan ($0.07) per half hour to use the umbrellas. But even those modest fees were not enough to prevent people taking the umbrellas out of circulation. The Southern Metropolis Daily article quotes a store owner working next to a designated spot for the umbrellas: “These umbrellas all disappeared just in a few days after they were placed. People took them home and never returned.”
On a popular social media thread (in Chinese), one internet user complained: “The sharing economy is a test of the civil quality of this nation. And sadly, we have failed this test many times.” But E Umbrella Sharing is undeterred — the company plans to put out another 5,000 umbrellas in Nanchang in mid-July.
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