On Feb 19, the State Information Center of China officially released “China’s Sharing Economy Development Report 2021”, the sixth annual report since it was first released in 2016. According to the report, in 2020, under the impact of the Covid-19 epidemic, new business forms and new models represented by the sharing economy showed great resilience and development potential.
About 3,377.3 billion yuan was traded on the Chinese sharing economy market, up 2.9 percent year on year. The impact of the epidemic on different sectors of the sharing economy is significantly different, making the imbalance in development in different sectors more prominent. The market size of knowledge and skills and medical sharing in China grew by 30.9% and 27.8% year-on-year, respectively. The market size of shared accommodation, shared office, transportation and other fields that need to be closed through offline activities decreased significantly year-on-year, with a decrease of 29.8%, 26% and 15.7%, respectively. Life services fell 6.5 percent year on year.
Shared services and new business forms and models of consumption have become important forces for enhancing economic resilience and vitality, the report said. From the perspective of the development trend of sharing services, the proportion of ride-hailing passengers in 2020 to the total number of taxi passengers is about 36.2%, a slight decrease of 0.3 percentage points year on year. Online food delivery revenue accounted for about 16.6% of the national catering industry revenue, 3.8 percentage points higher than last year. Revenue from shared accommodation accounted for 6.7 percent of China’s hotel room revenue, down 0.2 percentage points year on year. From the perspective of residents’ consumption, per capita online takeout spending will account for 16.6% of catering consumption in 2020, an increase of 4.2 percentage points year on year. Per capita spending on online ride-hailing accounted for 11.3% of travel consumption, basically the same as last year. Spending on shared accommodation per capita accounted for 4.9 percent of the total, down 2.5 percentage points year on year.
The report concluded that China’s employment situation was generally stable and better than expected under the impact of the epidemic, which could not be separated from the implementation of a series of employment preservation policies, and also benefited from the development of the sharing economy which provided a large number of jobs. Measurements show that the number of participants in the sharing economy is about 830 million, including about 84 million service providers, an increase of about 7.7% year-on-year; the number of employees of platform enterprises is about 6.31 million, an increase of about 1.3% year-on-year.
According to the report, sharing economy platform companies continued to innovate in terms of business layout and marketing model in 2020, with many bright spots. First, the enterprise service market has become a new battlefield of competition. More and more shared platforms are expanding from the previous C-end consumer business market to the B-end enterprise service market. The transformation of the development focus of platform enterprises has also become an important driving force for the digital transformation of various industries. Second, the sharing economy and webcast marketing were deeply integrated. Shared platforms have become an important application scene and stage of live broadcast marketing. Network live broadcast marketing makes the transaction process of the platform more visual, emotional and interactive, and the consumption intention and user stickiness are enhanced. Third, new forms and models of shared manufacturing have developed in an all-round way. The advantages of shared manufacturing were highlighted in the extraordinary period of anti-epidemic. Leading enterprises in the industry continue to increase resource openness and sharing, take platform product development and operation as the core, innovate service models, integrate resources to enable innovation and entrepreneurship, especially for small, medium and micro enterprises to accelerate development. Fourth, the ecological expansion of large platform enterprises was further accelerated. By taking the main business as the core to expand to the upstream and downstream of the industrial chain, or horizontally expand to other areas, the enterprises further built and improved the platform ecology. But as expansion accelerates, there were growing problems about the monopolies of the big platforms.
The report analyzes that China’s tailor-made regulatory system in the sharing economy continued to improve. First, China made major breakthroughs in the institutional barriers that previously prevented new forms of business. Shared health care is a typical area where the pace of institutional innovation was accelerated by the epidemic. In the face of the sudden surge of diagnosis and treatment pressure and the need for epidemic prevention and control, China has made important progress in bringing Internet medical care into the scope of medical insurance reimbursement, remote settlement of medical services, electronic prescription circulation, and exploring and implementing the first diagnosis of Internet medical care in 2020. Second, to address the problems in the development of new forms of business, tailor-made regulatory efforts were also increasing. In 2020, China strengthened supervision and regulation on competition behavior of large platforms, online marketing and transaction behavior, personal information protection, and network protection of key groups such as teenagers.
The report points out that there are still some problems to be solved in the development of China’s sharing economy. Large platforms have brought many adverse effects on unfair competition behaviors such as improper use of market dominance, data monopolization and monopolistic expansion. The “cross-border” provision of financial services by large platform enterprises is increasingly common, which brings about potential risks and problems such as effective supervision difficulties, possible infringement of users’ rights and interests, and social risks caused by improper handling of financial risks. Traffic fraud, traffic hijacking and other malicious competition based on traffic are becoming more and more prominent. In addition, how to effectively protect the mass of personal information collected on the sharing platform and how to strengthen the protection of minors’ use of the Internet have become issues of high concern from all circles.
According to the report, in 2020, the growth rate of the sharing economy dropped significantly due to the impact of the epidemic. Considering the possible strong recovery of the macroeconomy of China, the growth rate is expected to pick up significantly in 2021, which is expected to reach 10%-15%. China’s sharing economy is expected to grow at an average annual rate of more than 10 percent in the next five years.
From the perspective of development trends, the new business forms and new modes of sharing consumption will play an important role in the construction of a new development pattern of double cycles. From the perspective of policy orientation, the development of new business forms and new modes represented by sharing consumption will become an important starting point. At the same time, scientific and effective anti-monopoly supervision of the platform economy has become the general trend. In the future, regulations in China will pay more attention to safeguarding the legitimate interests of all parties, focus on preventing and stopping the behaviors of big platforms that inhibit market innovation, and strengthen the supervision of collaborative behaviors of platforms. The strengthening of anti-monopoly regulation will put forward higher requirements for the compliance management of platform enterprises, and will also affect the investment direction of the Internet industry. In the future, the “cash-burning” competition of large platforms will become more cautious, and the phenomenon of hostile takeover for market share will be less and less. In addition, the profound changes in the domestic and foreign environment will make the internationalization expansion of Chinese platform enterprises face greater challenges and risks.
Source: Beijing Youth Daily