While the “sharing economy” based on communal use of items and spaces has rapidly expanded in China with ride-sharing and other services, sudden service interruptions and unreturned deposits are also rising to the surface.
In July 2017, China‘s largest bookstore operator Anhui Xinhua Distribution Group Holding Co. opened a “sharing bookstore” at the Sanxiaokou Xinhua Bookstore in Hefei, Anhui province .
After downloading a smartphone application, if users made a deposit of 99 yuan (roughly 1,700 yen), then they could check out books for 10 days from the store free of charge. After the 10-day period, 1 yuan per title is charged.
Users can easily read the newest releases, including mystery novels by Keigo Higashino that have gained popularity in China, and the bookstore can also attract a large number of new customers.
In just half a year, the company has expanded the sharing bookstore to 28 locations throughout the country, and users of the app have reportedly exceeded 250,000 people.
“We get positive responses from users like, ‘The bookstore has become a library,'” says Anhui Xinhua publicity manager Lu Qing.
What have also become increasingly common sights in China are “shared umbrellas” concentrated around subway stations. If a user inserts a refundable deposit into the machine, they can use an umbrella for free, only paying an additional fee if they are late in returning the item.
The Chinese have a great affinity for the sharing economy as the use of smartphone apps for making purchases has spread widely around the country, and services originating in North America and Europe like car-sharing, renting rooms in private accommodations and ride-hailing also quickly caught on.
With many new ideas like jewelry and shopping cart sharing, just like the bicycle sharing service already operating in over 20 countries, the sharing economy has given birth to new business opportunities originating in China.
The scale of the Chinese sharing economy in 2016 grew 3.5 trillion yuan compared to the previous year, and had a total of 600 million participants.
The word for “share” in Chinese, “gongxiang,” even made it on the list of China’s top 10 buzzwords of 2017, and President Xi Jinping praised the expansion of the sharing economy as “a new driving force (for the economy),” setting it up for success nationwide.
However, expanding to the size that it has, problems are also rising to the surface. Fierce competition to lower prices for bicycle- and car-sharing has led to worn-out operators abruptly halting services, and problems with deposits not being returned are occurring one after the other.
One business sharing smartphone chargers expanded quickly for a period of time before its popularity died out, forcing the operator to restructure and retire the service. There are also many cases where companies offering ride-hailing and housecleaning services have not signed clear contracts with employees, and trouble involving wage payments and accident management occur frequently.
The National Development and Reform Commission of the People’s Republic of China and other main agencies released a statement about the government’s stance concerning the “sharing economy” in a broad sense in July 2017, and created rules for things such as the strengthening of monitoring systems. “Gongxiang is a ‘new force’ in China’s economy,” it said, “but it is also facing many problems with the system and lack of security.”
These problems with the system aren’t limited to China, but extend overseas to the U.S. and Europe. A major representative of the sharing economy, ride-hailing service provider Uber Technologies Inc., has come under fire for a variety of problems, including drivers assaulting passengers, leading to the service being banned in London and other cities.
Whether or not these types of services can handle the side effects of their rapid growth is an issue the whole world, including Japan, is watching carefully.