Challenges in the Sharing Economy

ShareX's team has been involved in the sharing economy industry since 2014. Through collaboration with brands in various countries, we have gained deep insights into the challenges and pain points of implementing and operating sharing economy models on a global scale. These challenges can be summarized into four key areas:

1) Liquidity Issues

The sharing economy typically involves upfront investments that yield long-term, sustainable returns. Based on the success of some sharing economy brands, it is evident that fostering user habits in the early stages often requires high-density, widespread deployment of devices. This demands significant financial resources from brands. For instance, in countries like Japan and Russia, which have relatively high shared power bank adoption outside of China, early-stage brands invested over tens of millions of dollars to deploy tens of thousands of devices, achieving rapid market penetration and user education.

However, there is no effective global mechanism for asset liquidity, meaning funds cannot be quickly recovered and reinvested to expand operations. Consequently, the lack of cash flow and liquidity has become a critical barrier to localized growth for sharing economy brands.

2) Deployment Challenges

The operation of sharing economy models relies on two key components: shared devices that provide the service and offline spaces with user traffic. During the early stages of local expansion, brands often face difficulties in deploying purchased devices into offline spaces efficiently. This delays the transformation of early investments into valuable assets. The underlying reasons are complex, including local demand variations, legal and regulatory compliance, business models, and operational costs.

3) Trust Issues

Trust is a critical pain point in the collaborative scenarios of the sharing economy. In IoT-driven sharing economy models, issues such as hidden or manipulated operational data and misappropriated revenue distribution are prevalent. Data manipulation has become an industry-wide "open secret," and despite regulatory crackdowns, it remains rampant.

The root cause lies in centralized systems where platforms control data permissions. These platforms have both the capability and incentive to act maliciously for greater profits. This behavior inflicts substantial and often invisible losses on all participants across the value chain, hindering the healthy and scalable development of the sharing economy.

4) Payment Issues

In many countries and regions, traditional payment systems are underdeveloped. China leads in mobile payment adoption, allowing users to complete transactions with low fees via platforms like WeChat Pay or Alipay, often without requiring deposits. However, in many regions outside of China, mobile payment systems, credit infrastructures, and payment tools are immature or user-unfriendly.

For example, some regions lack partial refund capabilities in payment tools or impose fixed transaction fees that are unfavorable for micro-payment scenarios. These limitations restrict the adoption and growth of local sharing economy initiatives.

These challenges underscore the complexity of globalizing sharing economy models and highlight the areas that require innovative solutions for sustainable development.