China's sharing economy market will maintain an annual growth rate of over 30 percent in the next three years, thanks to the public's active participation, government's policy support and mature business mode, a new report said.
The report, released recently by the Sharing Economy Research Center under the State Information Center, showed that in 2018, the transaction volume of China's sharing economy market reached 2.94 trillion yuan ($439.8 billion), up 41.6 percent on an annualized basis. There were 5.98 million employees registered on sharing economy platforms, up 7.5 percent year-on-year. A total of 760 million people participated in the sector, of which 75 million were service providers, up 7.1 percent from the previous year.
"China's sharing economy market and the employment in the sector witnessed rapid growth despite rising macroeconomic downward pressure," said Yu Fengxia, deputy director of the Sharing Economy Research Center.
Investment into the country's sharing economy sector dropped 23.2 percent year-on-year to 149 billion yuan, mostly due to the rational investment patterns of investors amid fierce competition in ride-sharing sector.
The report also showed that unicorn companies in the sharing economy sector were expanding rapidly. By the end of 2018, there were 83 unicorn enterprises in China, among which 41 percent, or 34 enterprises, were in the sharing economy sector. In 2018, 11 sharing economy companies turned into unicorns.
In addition, as pointed out by the report, the sharing economy is being seen as the new momentum for the transformation of the service industry. By introducing sharing economy, the structure of the service industry is constantly being optimized, and its scale is expanding more rapidly. From 2015 to 2018, the sharing economy contributed 1.6 percent, 2.1 percent and 1.6 percent, respectively, to the growth of the travel, accommodation and catering industries.
The penetration rate of shared services also increased. By June 2018, there were 570 million consumers making online payments, 260 million more than the level of 2015, and the annual growth rate reached 16.9 percent. The penetration of shared service among netizens increased from 46.9 percent in 2015 to 71 percent in 2018, statistics from China Internet Network Information Center showed.
"We are living in a society which constantly pursues efficiency improvement. Resources that are not fully utilized give birth to sharing economy. I am confident that as the sharing economy penetrates into more and more industries, it will create great value to our society," said Li Xiao, founding partner of Joy Capital.
Apart from its role in the service industry, the sharing economy contributes to employment and consumption. "Food delivery services, as part of the sharing economy sector, boosted employment in the country. Take Meituan Waimai as an example, a total of 2.7 million employers earned money from the platform in 2018, 22.7 percent higher than the previous year. There are over 600,000 active delivery drivers every day," said Zhao Dawei, director of the research center under online food review and delivery company Meituan-Dianping.
"It is estimated that in the future, the sharing economy will continue to stabilize and promote employment. As flexible workers, more and more people are able to participate in sharing economy activities, according to their interest, technique, time and resources.
"Also, the sharing economy's potential of stimulating consumption will be released, as it can not only satisfy consumers' needs limited by the traditional service mode, but also boost their new consumption needs. As people's consumption concepts change, shared services will penetrate into people's major fields of life, and serve as the main driving force to fuel consumption," Yu said.
Promising as the future is, many problems still remain. For example, the supervision mechanism needs to be updated, the government and enterprises should increase the level of data sharing, and enterprises in the sharing economy sector should better fulfill their corporate social responsibility, to promote the sustainable and inclusive development of society.
Wang Qing, deputy director of the Institute of Market Economy under the Development Research Center of the State Council, noted that "to develop the sharing economy, the basic system of the internet-based economy should be improved, such as establishing rules to protect consumers, to ensure fair competition and to promote cross-border integration. In addition, we need to solve the contradiction between traditional regulatory methods and innovative development requirements, and introduce new supervision mechanism."
"Besides, it is crucial to strengthen theoretical research and rationally draw on international experience," he added.