“SHARING ECONOMY” IN INDIA
******************************************************************************* Globally, the sharing economy is estimated to grow at a CAGR of 139% to reach US$115 billion by 2016 from US$3.5 billion in 2012.
According to ASSOCHAM’s predictions in 2014, the used-goods market would cross the 1,50,000-crore mark in the year 2015 and is seeing a YoY increase of 12percent.
According to a recent report in The Mint, shared rides account for 25 to 30% of overall trips made by Uber and Ola in major cities.
The sharing economy is estimated to grow from $14 billion in 2014 to $335 billion by 2025.
This estimate is based on the rapid growth of Uber and Airbnb as indicative.
Data shows that private vehicles go unused for 95 per cent of their lifetime.
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The sharing economy, or collaborative consumption, is growing rapidly in India.
Definition:-
******************************************************************************* 1. The rise of peer-to-peer platforms commonly referred to as the “Sharing Economy” is broadly based on the concept of renting, borrowing, lending and co-owning of goods, space, time and talent. This collaborative form of consumption leverages efficient utilization of resources. The proliferation of mobile devices, applications, and payment systems has also acted as a major catalyst in fueling the growth of this trend.
2. From sharing content and media online, Internet has now enabled people to share physical things like homes, vehicles, appliances, furniture, etc with each other.
3. The sharing economy is a socio-economic ecosystem built around the sharing of human and physical resources. It includes the shared creation, production, distribution, trade and consumption of goods and services by different people and organizations.
4. The uniting factor for these companies and initiatives is their ability to bring people together, often through an online platform, to share or exchange underutilized assets without large transaction costs.
5. Consumers, on-demand technology platforms and suppliers are critical elements of the sharing economy ecosystem, and their effective interaction leads to increased efficiency aimed at achieving better utilization of resources for all the concerned stakeholders
6. An economic system in which assets or services are shared between private individuals, either free or for a fee, typically by means of the Internet.
7. Access to goods and skills is more important than their ownership. The sharing economy basically relies on its ability to use resources optimally to give best throughput and is seemingly a more efficient, productive and a better system with built-in creation of global communities with neighbourly values.
8. A sharing economy is nothing new - it's simply a modern way of living well together.
9. The sharing economy is “the peer-to-peer based activity of obtaining, giving, or sharing access to good and services”. Alternative names for this phenomenon include gig economy, platform economy, access economy, and collaborative consumption.
Earlier, people owned brand-new cars but are now gradually looking at alternative options of sharing or renting a car only when required.
Sharing economy activities fall into four broad categories:1.Recirculation of goods
2.Increased utilization of durable assets
3.Exchange of services
4. Sharing of productive assets
Drivers of Sharing EconomyJeremiah Owyang, Founder of Crowd Companies, points out the three drivers that are making sharing a transformational movement. These three drivers have created a conducive environment for sharing economy to blossom at its best.
Societal drivers
People are becoming more considerate about the environment and sustainable development and this has led to a greater interest in sharing rather than owning. Millennials are gradually becoming less and less materialistic. There is no taboo associated when a person opts for these new-age options.
Economic drivers
Inflation of prices and recession of economy is also letting people look at alternative options like buying pre-owned goods and/or rented goods. The rate of inflation is at its peak and there is a constant slump in the market, these trends are set to propel the sharing economy further.
Technological drivers
Improved technologies like smartphones, Internet penetration, lean logistics, simple payment systems etc., have also eased peer-to-peer sharing. Most of the hindrance that was present in enabling sharing economy has been successfully tackled with the help of technology. Now is the time when the sharing economy movement can soar high with community effort.
There are three primary forces driving the sharing economy. They are:
Economical — Collaborative consumption makes use of idle inventory, monetising excess capacity and thereby reducing the cost of ownership. It gives customers the financial flexibility they seek by renting/sharing resources rather than owning them.
Environmental — Rapid mobility of people from rural to urban areas has resulted in an increase in the population density of cities. Carpooling, ride sharing concepts are gaining momentum not only due to customers’ desire to escape the ill-effects of congested roads but also as a means to contribute to the reduction of pollutants.
Technological — Mobile devices, applications, social networks, and payment systems have helped in identifying real-time demand for goods and services and has paved a path for frictionless transactions between businesses and customers.
Benefits of sharing economyCustomers enjoy numerous benefits from rental, on-demand, subscription and try and buy models at a lower cost and in a convenient manner.
******************************************************************************* Saves money
Saving money is always on our mind. The motive behind saving can be planning a dream vacation, education of your child, retirement fund, or for your new startup. Irrespective of what the motive is, sharing economy will help save you those bucks.
Environment Sustainability: -
Global warming, e-waste, deforestation, pollution, depletion of ozone layer, green house effect and whatnot! We all have heard of these effects and how we human beings are constantly harming our environment. Sharing economy might not be the ultimate answer to all the environmental issues but it sure helps curb them to an extent.
Flexibility in lifeYou do not have to own it to experience it. The more stuff you own, harder it is to adapt to change. Your life would be filled with behemoth white elephants unless you take it onto yourself to declutter it.
Opportunity of Trial Before Purchase:-
Not sure if a particular model of an appliance is the right one for your home? It would be so much better if you could try it at your place for long enough to take the right decision and not make an impulse purchase.
Social belonging: -
Sharing economy is a rising movement. Throughout the world, communities and companies are adopting and enabling this movement. Join this movement and be a part of this rapidly growing community.
Millennials will shape sharing economyMany publications and researchers have pointed out how millennials will shape the sharing economy. Millennials display a change in attitude and have displayed a delay in buying behaviour. Considering the fact that more than 65percent of India’s population is under the age of 35, it is safe to say that India is a welcoming place for the sharing economy boom.
Increased sales and business opportunities due to a wider reach in the market.
Consumers: Benefits :-On-demand services at lower prices, convenience and variety of options.
Technology providers and suppliers:
Better utilization of infrastructure
Easier access to wider customer base
Increased business opportunities for micro-entrepreneurs.
Increased demand for goods and services
Enable suppliers to tap new customer groups who can access their platforms via the internet
Why will it work in India?The trends that we see internationally also stand true for India.
High Purchasing power:- HUGE Middle Class
When compared to India’s western counterparts, the purchasing power is substantially less.
Youth :- Millennials will shape sharing economy
Many publications and researchers have pointed out how millennials will shape the sharing economy. Millennials display a change in attitude and have displayed a delay in buying behaviour. Considering the fact that more than 65percent of India’s population is under the age of 35, it is safe to say that India is a welcoming place for the sharing economy boom.
High-population density: - Crowded Cities as a Economic benefit
India has a very high population density of 368 per sq.km,while in the US it is 33 per sq.km. This means that we have 10 times the population density of the US! On the flip side, this means that there are more goods and services available much nearer than in any other country. This helps in enabling hyperlocal services which eases the availability and logistics issues.
Ever Increasing urban population
The trend of sharing is more popular and acceptable among the urban population. It is predicted that by 2025 India will have about 42percent of its population in urban cities
******************************************************************************* Various industries in India have been disrupted by the sharing economy model. The highest adoption so far has been in logistics, hospitality and food and beverages segment.
Logistics — Uber, Ola and Vroom
Hospitality — Airbnb, OYO rooms
Food and Beverages — Swiggy, Zomato
Uber, the world’s largest taxi company has reported that over the last year, uberPOOL riders in Bengaluru have contributed to 93 million kilometers of shared rides, resulting in savings of approximately 4 lakh litres of fuel and emissions reduction of 10 lakh kilograms of CO2.
BMW has started offering cars on demand and renting their 1 Series electric cars under their DriveNow program.
Flyrobe :- Mr Surana launched online fashion rental service called Flyrobe along with two other co-founders last year. Flyrobe allows customers to hire women’s clothing from brands such as Zara and French Connection, for a fraction of the cost of buying them. Flyrobe purchases the clothes and keeps its own inventory, and rents this out.
The most visible manifestation of this fast growing sector of the economy is the app based shared taxi rides offered by the likes of Ola and Uber in cities across the country.
Smartmumbaikar.com is another company that is offering something different. For a monthly fee, it connects private car owners in Mumbai who drive to work every day with people who want to share a ride with him or her at a pre-determined fee. The whole thing works seamlessly via Whatsapp groups.
Fabrento, Rentickle and Furlenco are companies that allow people to rent furniture and appliances.
The sharing economy has spurred “micro-entrepreneurs” and facilitated the creation of new markets and economic activity where none previously existed.
Enterprising citizens can now generate income by renting assets as varied as furniture, camping equipment and parking spots.
Better resource utilization, social mobility through new jobs, flexibility to operate at one’s convenience and skill development are some of the important benefits
FUTURE GROWTH:-With internet penetration in India at just 19.2%, there is significant opportunity for the companies in the sharing economy to grow.
Opportunities it presents are substantial, given the demographics, market demand and shift in consumer preferences.
The San Francisco-based Airbnb, valued at more than US$25 billion, allows users to rent out their homes and rooms through its platform. The company has highlighted the importance of India to its global expansion strategy. “India is a top priority for the company,” says Nathan Blecharczyk, a co-founder of Airbnb
“The concept of the sharing economy is still at a nascent stage in India,” & sharing economy will open up a number of interesting possibilities across different economic activities, and change the future of work, production and collaboration.
******************************************************************************* https://medium.com/@VroomIndia/sharing-economy-in-india-106a8849d5df http://blogs.nasscom.in/the-rise-of-the-indian-sharing-economy/ https://www.thenational.ae/business/india-s-sharing-economy-paves-way-for-budding-entrepreneurs-1.154386 http://www.liveinstyle.com/black-white/the-rise-of-the-sharing-economy http://www.forbesindia.com/blog/health/sharing-economy-is-this-the-end-of-hyper-consumption/ https://angel.co/india/sharing-economy-4/jobs https://www.quora.com/How-is-India-doing-in-terms-of-Sharing-Economy http://www.thehindubusinessline.com/opinion/problems-with-sharing-economy-in-india/article9553964.ece
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