Rise of The Sharing Economy: Will Indian Consumers Embrace The New Concept?

Following the economic horror story the world had witnessed in the last decade, many of us were forced to rethink our understanding of how things work. One of the root causes behind most of the recognisable problems we are facing today is unchecked consumerism. The more we buy, the more the companies produce and the more they produce, the more we use up some of the key limited resources this planet provides. So why don’t we reduce consumption of goods?

One of the most innovative social and economic trends to keep an eye out for these days is the idea of shared economy. The core concept is pretty simple – we buy what we need but what do we do with it when we don’t need it?

We pass it on to someone who does. So, while brands, companies and even governments are trying to figure out innovative ways to influence each and every consumer, the idea of paying for goods or services, not as an individual but as a group, is like a total disruption of the established order of consumerism. This type of hyper consumerism acts like a trampoline for inflation. Therefore, it is deduced that overt consumerism is bad; but that still does not negate the fact that people need things. Again, the solution is simple – when we don’t buy, we rent.

In the US, sharing economy-based start-ups are not merely a trend. Over the past 3-4 years, a significant section of the population has realised that not owning as much junk is the way to go. Monetise everything that can be monetised – this is the new mantra. According to a Forbes article, the revenue flowing through shared economy into the wallets of people is about $3.5 billion and it is growing at a rate of 25%.

In the post-economic collapse world where wages have stagnated all over the globe, this sort of income boost is a hugely disruptive economic force. To a traditional and conservative economist, say someone who subscribes to the Milton Friedman school of thought, the idea of sharing one’s assets can be baffling. He might even call it foolhardy and quite frankly, most of us would have done the same five years ago. But now, no one can question your choice to rent out your spare room or couch using Airbnb.

You can use Lyft to go from point A to B in a stranger’s car, someone whose day job is not necessarily driving. If you are looking for home-cooked food while passing through a town, you can look up ‘dining at home’ options using Feastly. Using a service like Zilok, you can even rent out your nail gun or power drill for $10 a day, instead of using it once or twice a year.

One of the stereotypes that has been attached to sharing economy is the demographic that is part of it. Many believe that it is only the urban, middle class and fashionably Left-leaning hipsters with a lot of ‘western guilt’ who use such services. While such a group might have ushered in this economic and cultural force in its nascent stage, legitimate sociological surveys show that people from different backgrounds are more than willing to open up to the idea of sharing.

A Nielsen survey of the Internet users in 60 countries revealed that more than two-thirds of the population wanted to be part of a shared economy. Around 78% people in the Asia-Pacific region are willing to share their assets while 81% don’t mind paying for such services. In a developing market like India, where the number of smartphones and mobile Internet users is rising fast, sharing economy start-ups can create infinite opportunities.

One of the most popular India-centric groups on Facebook is Put Me in Touch where one can put in a request to be introduced to someone with a specific skill or someone who provides specific services. The strength of the group, which mainly includes Bangalore-based people, is over 45,000 and it is growing every day. Now that the Football World Cup season is on, some of the posts featured there are about renting out TV sets to people who don’t own them. A similar Indian website called Kindset.com is in the making. Another Bangalore-based service called Rentongo.com is also operating in Mumbai and provides all kinds of renting options, starting from small household appliances to cars and apartments.

The interesting thing about sharing economy in developing markets like India and Brazil is that it lets the people of those countries avoid the mistakes their counterparts in the developed world had made. The social isolation that consumerism brings can actually be negated through such community-driven ventures and the added income boost ensures that such ventures will always be viable.