Continued growth expected in the sharing economy
March 2, 2021 Category Macro-economy, Weekly
The growth rate of China’s sharing economy sector is expected to be between 10% and 15% this year, and maintain an average annual growth rate of over 10% in the coming five years, thanks to an expected strong recovery in the macro-economy, according to a report by the State Information Center (SIC). In 2020, amid challenges brought by Covid-19, new business modes featuring the sharing economy demonstrated tremendous resilience and development potential. The trade volume of the sharing economy for the year surged 2.9% year-on-year to CNY3.38 trillion. The pandemic’s influence on different areas of the sharing economy varied. The market volume of the sharing healthcare sector grew rapidly, with year-on-year growth of 27.8%. In contrast, the market volume of sharing accommodation, office-space and transportation dropped by 29.8%, 26% and 15.7%. “Sharing services and new consumption modes had been playing a critical role in boosting national economic resilience and vitality. Meanwhile, sharing economy platforms were constantly innovating business strategies and marketing modes, thus demonstrating various advantages,” said the report. In 2020, one major change for the country’s sharing economy sector was that more and more enterprises, which mainly served the consumer-end, expanded their businesses to the business-end.
Xiaozhu, a Beijing-based sharing accommodation website/app, signed a strategic partnership with Bytedance’s enterprise service platform Feishu last year, offering accommodation for business trips, corporate team-building exercises, and training conferences for registered enterprises on Feishu. Ziyouxin, a flexible employment platform under Tencent’s finance and taxation technology arm GoldenTec, actively responded to surging hiring requirements of enterprises during the pandemic. In February of last year, it launched an emergency recruitment service called “shared employees”, offering more than 10,000 workers to enterprises.
Another new feature highlighted in the report was that the sharing economy was further integrated with internet-based marketing approaches, creating more platform-user interaction and user stickiness. For example, in July, Xiaozhu teamed up with Xiaohongshu (Little Red Book), an Instagram-like Chinese fashion and lifestyle sharing platform, inviting key opinion leaders (KOLs) and key opinion consumers (KOCs) on the platform to share their accommodation experiences. Huang Wei at Xiaozhu’s public affairs department said: “KOLs and KOCs share their living experiences on Xiaohongshu, and interact with users in the online community, encouraging them to pay a visit to the recommended accommodations. In this way, a circulation running from online to offline is formed.”
Data from Xiaozhu showed that between July and November, the transaction volume brought by Xiaohongshu’s channels surpassed CNY10 million, and the monthly growth rate of gross merchandise volume (GMV) stood at 350%. By November 25, 1,610 sharing accommodation brands were registered on Xiaohongshu. “Online marketing communities such as Xiaohongshu can reach more potential users, creating more demand for travel and accommodation. Meanwhile, content platforms are further integrating with the tourism industry, bringing new traffic and growth opportunities,” Huang said.
“When the pandemic is over, the focus of enterprise competition lies in how they realize user retention and profit mode innovation. Efforts are needed in product innovation and service quality enhancement,” said the report. Fan Jiping, Director of the WeDoctor Digital Medical Consortium, said that in the post-pandemic era, there will be increasing market demand for high-quality services integrating online and offline modes of business. How to take advantage of digital technologies to build a service system that satisfies healthcare needs of various patient groups and raises the efficiency and level of the industry – that remains a key issue for us,” Fan said, as reported by the China Daily.
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