Sharing Economy
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Written by :
Mothilal De Silva
5 years ago
I+Industries > Sharing Economy
Last Edit at: Sep 16, 2020
Creating Collaborative Eco-system
The world is at an inflection point as the formal frameworks of establishments are becoming obsolete and challenged by the collaborative, network and sharing economies which were created by internet platforms such as Asset Sharing Platforms (Uber, Didi Chuxing,Airbnb, Tujia), Open Source Platforms (My SQL, Perl, Apache), Platforms to share Application Programming Interfaces ( APIs), SDKs, (Apple iOs, Android, Google Maps, Gov.net), Platforms for Co-Creation (Miaopai, Youtube, Wikipedia, We Chat, Facebook etc), Crowd Sourcing / Funding Platforms (LuFax.com, Lending Club, Kickstarter). Network/Sharing or collaborative economy thrives on sharing, openness and connectedness.
Open Source and API sharing are some of the key tools contributing for the fast growth, augmenting Start-ups and Unicorns ecosystem, outside US.
| Traditional /Legacy Economy | Network/Sharing or Collaborative Economy |
|---|---|
Traditional Hotel – Starwood, Hilton Hotel, Accor Hotel
|
Room Sharing Platforms –Airbnb, Tuijia
|
Car Rental - Hertz
|
Ride Sharing, Ride Hailing Platforms – Uber in China backed by Tencent, Didi backed by Alibaba, Yongche backed by Chery, Lyft backed by General Motors, Zipcar owned by Avis
|
Cable TV
|
VoD Platforms - YouTube, Yokou Tudou, Toutiao, Miaopai, ,Taobao Live, JD Live
|
Traditional Incumbent Banks
|
Collaborative Financing Platforms – Lufax.com, Lending Club, Kickstarter
|
| Traditional Closed Software – Microsoft , Oracle | Open Platform, Free and Open Source Software –Android, My SQL, Mozilla Firefox browser, Web Server Apache, Content Management systems like Word Press, Drupal, Linux
|
| Incumbent operators – Traditional Banks, Telecom operators, | Opening Platform through APIs – Google Map; Chinese Tuijia hotel share web site share APIs with travel sites such as CTrip and eLong and We Chat Wallet; Uber APIs were released to collaborate with Hyatt Hotel Chain, Trip Advisor travel site, Starbucks; Facebook Login feature for Trip-Advisor and other sites; Twitter feeds to other sites; Airbnb is offering Facebook integration; AI platform of Baidu Ventures is opening to manufacturers of cameras, 3D sensor, IoTs, virtual retailers, logistic companies to make “The Biggest AI ecosystem in China” which is at the disposal of Start-ups. Baidu’s Automatic Diving Technology developed on AI had also been opened to others as an Open-Source Platform. |
Economic advantages of Sharing Platforms
The Sharing economies are built on Platforms that has been challenging traditional legacy economies. They are gaining a foothold in Asian, European and American region. Network companies are highly scalable and create value through customer co-creation, advocacy, and sharing. Growth, profit and scaling advantage of network or shared companies result in unprecedented market valuations compared to Traditional companies (see Figure below).
- Applications and Devices – Smart Phones, location-based GPS, Apps Stores, Different Secure Payment modes such as Credit Card / Pay Pal/ Ali Pay, IoT
- Big Data and Trust Enablers – Social Media, Ratings and Reviews and massive data crunching through Big Data Analytics provide a level of trust and credibility to apps like Didi, Grab or Uber. These Platforms had developed in a Collaborative Eco System using Big Data. Example: 1.Directing drivers to locations where the probability of finding a fare is high. 2. Via big data platform, a customer can see closest drivers and their ratings.
- Applications Programming Interfaces (APIs) – API enables developers to connect their software to another companies’ data and software and more.
| Traditional Firm in Legacy Economy (Asset Builders) | OTT (Disruptors, Network Orchestrators) in Sharing Economy |
|---|---|
| Stores/Retail, Wall Mart - $ 190 Billion Market Cap, 11k retail locations | Alibaba (China) - $200 billion, 0 retail locations, No Warehouses Meituan – Dianping (China Unicorn) - $30 billion, 0 retail locations Rakuten (Japan) – Market Capitalization is US $ 17 Billion, No physical Shopping Mall |
| Hotel, Starwood -$12.2 Billion Valuation, 1270+ hotel properties | Airbnb- $31 Billion Valuation, 1.5 Million homes for rent, Annual Transaction Growth estimated at 100%. 0 homes owned Tujia - $1.5 Billion Valuation, 650k homes for rent. Annual Transaction growth of 300% year-on-year, 0 homes owned. |
| Car Rental / Taxi, Hertz – $ 7 Billion market capitalization, 350k cars | Uber - $60 – 70 Billion Valuation, no cars, more than 1 million drivers Didi Chuxing -$56 Billion Valuation, No Cars owned. |
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Mothilal is a Co Founder of Internet Plus Asia, a co-creation platform for tech start-ups in Asia. Prior to this he was a Chief Executive Officer, Chief Strategy Officer, Chief Corporate Officer and Chief Operating Officer of number of Telecommunications and IT companies in Asia and Pacific regions for over 20 years. He is a turnaround specialist and a strategist. As CEO and C level executives, he was responsiblefor transformation and turning around many telecos. He was also instrumental in winning many international awards for these companies such as GSM awards in 3 consecutive years, International Asia Pacific Quality Award, Asia CSR award. He has obtained the Doctor of Business Administration from PPA Business School, Paris, receiving a Distinction for his DBA research, "Corporate Venture Capital as an engagement model to Co-create 5G ready services in Telco - Startup collaboration"
