The legacy Indian buyer is known for consuming commodities through a linear network of manufacturers, retailers, and distributors. Though prevalent, this business model requires consumers to take complete ownership throughout the lifecycle of the commodity. Today, however, Indian consumers prefer a different type of consumption – they would rather ‘share’ than ‘own’ assets. And why not? They are always on the go, and owning assets may turn out to be cumbersome. Shared economy businesses make a more compelling proposition as consumers gain temporary access to necessary goods and services without committing to the burden associated with ownership. Be it renting apartments and workspaces, pooling cabs, or leasing furniture, shared economy has become quite rampant in the Indian marketplace.
Companies that operate on these business models depend on data & digital platforms to provide services. The prevalence & dependence on internet-based services, especially in Tier I cities, has been a major driver of such businesses. Aligning closely with the evolving demands of consumers, companies such as Airbnb and Ola identify market gaps and come up with flexible, asset-light and cost-effective solutions. Doing so, they have carved a niche in Tier I cities and are now aggressively extending their footprint across the lengths and breadths of the Indian subcontinent. An EY report estimates that the global renting industry would hit the $335 billion mark by 2025.
- Brief Sectoral comparison between sharing and traditional economy business models
- Factors that promote shared economy
- Regulatory concerns
- Impact of shared economy & opportunities for business expansion
- Prevalence of shared economy in developed countries
- Future introspection