Just as almost everything in life is becoming sharable in China, the booming sharing economy is starting to see signs of slowdown and more rational thinking amid the frenzy.
The latest one to give up its sharing goal was EZZY, a luxurious car sharing platform that halted operations on Oct.25. The company no longer exists. Since October, EZZY users began to notice the shrinking number of cars available and problems retrieving their 2,000 yuan deposit.
Launched in March 2016, EZZY once boasted its ambition to become “The Hulk” in the car sharing business. It indeed caught many eyes – some 100,000 users, with fancy cars such as BMW and Audi. However, the company only rolled out some 500 cars for sharing, and users soon complained that the service was inconvenient because the number of cars was inadequate, Beijing Daily reported.
Cars owned by EZZY park outside a Hilton hotel in Beijing. Photo/China News Service
Of course, shared cars can never cover as many users as shared bikes. The latter witnessed the first ever merger case in its exploding development on the same day of the collapse of EZZY, when Hellobike was purchased by Youon, a deal that is expected to provide Hellobike with more capital and stronger support.
The merger aroused another round of gloomy pessimism over the bike sharing industry, especially after a series of dropouts of shared bikes companies including Wukong bike, which announced its bankruptcy in June as the first quitter in this new business.
Quitters are also withdrawing on other fronts, from shared chargers to shared umbrellas. On Oct. 11, shared charger company Ledian announced the end of its charger sharing operation after only six months.
But experts and observers remain optimistic about the sharing industry and see the slowdown as a move toward more rationality.
The crises facing some sharing companies are not a result of poor market performance, but because they are unable to profit under their own management and operational problems, said Cheng Shidong, director of urban traffic at the Institute of Comprehensive Transportation of National Development and Reform Commission.
“The massive market demand for the sharing economy still exists, especially in major cities like Beijing, since it fits the future consumption trend,” Cheng was quoted as saying by Beijing Daily.
China currently leads the world in sharing economy. In 2016, the sharing economy topped 3.45 trillion yuan, up 103 percent year on year. The number of people involved in it exceeded 600 million. In transportation alone, the market reached over 200 billion yuan in 2016, doubling that of 2015, according to a February report by the State Information Center.
The report also estimated that China’s sharing economy will maintain a fast 40 percent growth rate every year in the coming years. By 2020, the scale of economic transactions is expected to take up 10 percent of the nation’s GDP.