Bangkok--2 Jun--PwC Consulting (Thailand)
Trust, convenience, and a sense of community are all driving the sharing economy, in which renting and borrowing are replacing ownership, a PwC report says.
Five key sectors – travel, car sharing, finance, staffing, and music and video streaming – have the potential to increase global revenues of the sharing economy to around $335 billion by 2025 from roughly $15 billion today.
The new business model allows individuals or companies to make money from spare capacity or underused assets, according to a recent PwC Consumer Intelligence Series report, The Sharing Economy.
Also known as collaborative consumption or peer-to-peer economy, consumers are easily finding goods or services through digital platforms accessible on technological devices and social media to help make decisions and carry out transactions.
Vilaiporn Taweelappontong, a partner at PwC Consulting (Thailand), said that as global megatrends develop, digital technology is transforming the way people work, learn, communicate or even consume.
“We’re seeing a growing trend in the sharing economy in many industries around the globe,” Vilaiporn said.
“It saves people time and money, making our daily lives easy. Matching customer demand and supply is now easier than ever.”
Although there are still unresolved matters concerning liability, safety and regulatory issues in many areas, Vilaiporn said the sharing economy is upending business models across the globe. Essentially, it challenges other companies and consumers to rethink the use of their underutilised assets.
Trust issues
Among the notable success stories: Airbnb, one of the world’s fastest-growing start-up companies, helps travellers find spare rooms in their destination. It averages 425,000 guests per night and has listings in 190 countries, the report showed.
While Spotify pipes music to nearly 40 million users globally, ride-hailing service Uber continues to disrupt taxi and limousine markets. Despite public scrutiny and lawsuit battles, it operates in some 250 cities worldwide after just five years of service. Valued at around $40 billion, its market worth is reportedly more than some American airlines.
In Thailand, the US-based Uber became available last year and has intensified competition among other app-based taxi service providers such as Easy Taxi, Grab Taxi and All Thai Taxi.
“Trust, however, is a big issue when it comes to the sharing economy,” Vilaiporn said. “Customers must be able to put their trust in the services. It’s what allows someone to rent a room in a house from someone they’ve never met before or take a ride with a stranger from one place to another.
“Trust will be developed based on verified identity together with the information, feedback, and comments shared online,” said Vilaiporn.
The survey of 1,000 US consumers also showed that 44% of those surveyed said they are familiar with the sharing economy. While 18% of US adults say they’ve participated in the sharing economy as consumers, 7% say they’ve participated as providers.
Collectively, a growing wave of peer-to-peer (P2P) or access-driven businesses is changing the way consumers think about value – the impact of goods and services on their wallet, time and the planet.
The findings show that 81% of surveyed respondents think it’s more affordable to share goods than to own them individually, while 83% agree that it makes life more convenient and efficient, and 43% confided that owning today feels like a burden.
Some 76% of respondents also said the sharing economy is better for the environment.
The business of sharing
For years, the sharing economy has been present in many businesses, including automotive, hospitality, retail and consumer goods, and entertainment, media and communications.
While there’s positive momentum and optimism, unresolved concerns remain. Some 72% said that they’re worried about the consistency of quality received from the sharing economy.
“The sharing economy is big and inevitable and it’s growing at a rapid pace,” Vilaiporn said.
“To become a winner in the sharing economy, companies must recognise changes in consumer purchasing behaviours and adapt their marketing strategy accordingly.
“Not only do they need to examine their assets and overheads – identifying underutilised resources that could be tapped as potential new revenue streams – they need to engage themselves in shaping regulatory and policy frameworks through developing and complying with the law to legitimise their offerings to consumers and avoid unnecessary lawsuits.”