Young people in their 20s and 30s are rapidly becoming the backbone of China’s widening spending power. Known as millennials, they are more open to new ideas and business models. They are also expected to help shape the future of the sharing economy.
Chinese millennials were born when China started to have more access to global markets. They are more eager to spend on experiences than on possessions. They share everything from bikes and homes to clothes and power banks.
“This new generation of consumers looks for information on the internet rather than in the library, and the information comes to them. The sharing economy meets their needs and it’s very easy and very fast,” said venture capitalist Maggie Tan.
Besides bike sharing and apartment rentals, fashion rentals have emerged because of the booming sharing economy. Y Closet is a Beijing-based rental platform that doles out women’s apparel and accessories. The company targets stylish young people with big dreams and small budgets.
“These young millennials do not want to follow the crowd. They want to have their own styles. But they’re usually limited with their incomes,” said Doris Ke, marketing director of Y Closet. “They’re actually our core customers.”
Y Closet completed a 50-million-dollar fundraising round last year that was led by Alibaba, Softbank and Sequoia Capital. Now, the company teamed up with Taobao, China’s largest e-commerce platform.
The sharing economy is booming in China. When a good idea emerges, attention will be gathered and capital will rush in. But many players could not even survive their very first year.
“Last year, I looked at over 200 sharing economy projects. But to be honest, over 99 percent of them do not exist anymore,” said Tan.
How to keep a new idea in sharing economy from this curse of a short life span? Tan suggested two key elements for success: Technology and real demand.
Millennials’ flexible, minimalist and sustainable living styles are expected to help fuel China’s sharing economy in the coming years, while block chain and the internet of things is driving the sector in terms of technology. But analysts say that 2018 will still be a crossroad for the sharing economy because the new technologies still need to mature.