- The product of high-tech capitalist society -the Sharing Economy
As one of the results of the technological revolution, a new economic model based on the human propensity to “share” emerged, altering people’s lifestyles and purchasing habits. The development of the sharing economy attracted critical discussions. (John, 2016) It represents an emerging economic model that is fairer and more sustainable.” (John, 2016) A society in which “resources are available to all” is possible to be a reality. The enormous shift and rapid development of Internet technology, which is a byproduct of the high-tech capitalist social model, is surely one of the causes of the sharing economy’s explosive rise into the country’s dominant economic structure. The proliferation of the sharing economy is being aided by the use of mobile devices and networks, new payment methods being developed, big data, and blockchain technology. They are the incentives for the transformation of technology into a new model of digital life and economy. The sharing economy will grow from $14 billion in 2014 to $335 billion in 2025. On the one hand, the data demonstrates the economic potential of the sharing economy itself and the huge dividends it can deliver. On the other hand, the challenges of the huge economic dividend to the market are also worth thinking about.
2. Chinese Internet transformation and sharing economy :
Given the size and success of its sharing economy, China is a great one to conduct a critical analysis of the sharing economy. Data shows that China’s sharing economy market turnover will grow by 9.2% in 2021. The booming sharing economy in China is caused by simple mobile payments, powerful local algorithmic systems, comparatively well-developed Internet infrastructure, and a massive population. According to the current trend, China might adopt the sharing economy as one of its primary economic models. Mobile payments have made a significant contribution to the growth of the sharing economy in China. It is one of the key support tools for the sharing economy model. In 2021, more than 87% of Chinese internet users will use mobile payment services. China’s leading mobile payment platforms, Alipay and WeChat Pay, have over one billion users. Platform users can make payments more quickly and conveniently because of cashless payment solutions. The majority of Chinese popular mobile payment services, like Alipay, are offered by tech giants with security and reliability, including Jack Ma’s Alibaba. These businesses are equipped to offer technological assistance to secure the payment process. More people are eager to participate in the sharing economy sector because of these advantageous effects. When People scan QR codes on their cell phones to unlock and use the sharing bikes, they need to pay at the end of the trip. People can make it quickly by mobile payment. Digital platforms in the sharing economy can also use the data generated by mobile payment users for big data research, enabling businesses to offer better services based on customer behavior and preferences. When users place an order using the online taxi platform, the platform can examine the user’s order information and then notify customers with additional discounts. Globally, technology is evolving into a new economic model.
Investment, exports, and heavy consumption have been the key drivers of Chinese economic growth over the past several decades. This economic development strategy that sacrifices natural resources is unsustainable. At the same time, urbanization has resulted from quick economic growth. The issue of resource inequality has been made worse by the advent of urbanization. (Ma & Zhang, 2019) However, it appears that the sharing economy is quietly changing this view. In China, a sharing economy is referred to as “an economic activity that utilizes modern information technology such as the Internet to share the right to use and satisfy various needs by combining dispersed resources”. The sharing economy primarily consists of three elements: Users, platforms that connect service providers and users, facilitate transactions between them, and guarantee the quality of such transactions, and service providers of assets, resources, time, and talents. (Ma & Zhang, 2019) The sharing of assets and resources in the sharing economy has greatly increased the utilization of resources in society, for example, the rise of programs such as bike sharing and umbrella sharing. In the concept of a sharing economy, any idle resources can be utilized. (John, 2016) In addition, the sharing of resources also brings the possibility that resources can be fairly distributed to society. The sharing economy is based on “the innate social and cooperative nature of people”. Therefore, people tend to be in a natural and harmonious relationship rather than in an exploitative relationship. (John, 2016) Within the last 20 years, despite China’s average economic growth of 8%, economic development and poverty reduction have made strides. However, there are still about 30 million people living below the poverty line in China. (Wu et al., 2020) The sharing economy seems to be changing this situation. Taobao, China’s largest e-commerce company, has already invested heavily in the sharing economy model and has significant plans. Taobao’s sharing ecosystem model stems from the Taobao Village program. The program covers 335 counties and 16,500 villages in 27 provinces in China between 2007 and 2017. (Wu et al., 2020) The program involves two goals: helping farmers buy more and helping farmers sell more. The first goal is to cultivate the consumer market, and the second is to cultivate the production market. Such a model and program enables farmers to enjoy the same consumption and purchasing convenience as urban residents. At the same time, it helps farmers to buy more. By allowing farmers to buy farm materials directly from producers, transaction costs are greatly reduced. In addition, the program helps farmers to open up markets for their products. Farmers have the opportunity to sell their products all over the world. Talents are encouraged to return to their hometowns to start their businesses, leading to local job growth. Through the sharing economy, everyone has the opportunity to do business and farmers can become entrepreneurs. (Wu et al., 2020) In addition to bringing tremendous economic growth to China, the sharing economy also found a more sustainable and just way to develop China’s economic development model. The availability of resources in society and the gap between the rich and the poor have also been improved to a certain extent under the sharing economy model of the market.
4. Challenges :
Behind the huge dividends of China’s sharing economy lie many problems and challenges. Behind the explosive growth of the new economic model is the lack of relevant legal regulation and the problem of vicious competition in some industries. Many industries have attracted a large number of investors due to high profits. To compete for customers, many investors adopt a price war model for comparison. For example, two famous takeaway platforms in China, are Meituan and ELe.me. The two capitals are fighting for the market and customers to reach a monopoly and engage in a price war. For users, this may be profitable in the short term. But in the long run, this is a big obstacle to the development of the market. During the competition, Meituan was fined 3.44 billion yuan ($533 million) for monopolistic practices. In addition, the trust mechanism may become a big resistance to the development of a sharing economy. In China, there are many news stories about trust mechanisms. For example, when the Chinese government demanded that online car-sharing services share real-time travel data for security reasons, DiDi cited privacy concerns as a reason for not cooperating. It was only after a criminal case involving the rape and murder of two female passengers that the company finally relented. The news has caused uproar and discussion in China, and Didi has been forced to undergo rectification and offline in China as a result. Besides, the platform’s breach of trust issues, the passengers’ breach of trust also greatly affects the development of the sharing economy. In April 2017, People’s Daily reported that “China’s umbrella-sharing startups are a sign of progress in public services, a manifestation of humanistic care, and release the warmth of the city.” But later, it was reported that nearly all of the company’s 300,000 umbrellas had disappeared. The incident jumped into the headlines. The question of trust has never been unilateral. In the marketplace, a code of trust must be upheld by both platforms and users.
The development and transformation of Internet technology changed the dominant economic model in Chinese today’s society, as well as citizens’ living and consumption habits. (John, 2016) The sharing economy is digital. It fosters equity and enhances social relationships and communities. Even if this new economic model still has hidden risks including regulations, trust systems, and fierce competition. However, the significant benefits it offers and the fresh outlook on society are sustainable. The sharing economy has the potential to replace the traditional economic model as the norm in China and around the world with improvements to the system and management by the government and organizations.
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