The sharing economy, led by companies such as Uber and Airbnb in the United States and Didi and Mobike in China, has become one of the major trends of the past decade. This trend is driven by basic economic principles and straightforward business logic rather than by a rejection of ownership or a desire to reduce consumption.

Sharing platforms can provide access to new markets and customer groups by lowering costs for consumers who want to use an asset but either cannot afford to own it or need it only for a short period. Such platforms can also increase the purchase value of shared assets, as buyers are often willing to pay more for products that can generate income through sharing.

China has become one of the world’s largest testing grounds for the sharing economy. In 2016, Baidu CEO Robin Li stated that this economic model was consistent with the country’s socialist values. A government research center specializing in the sharing economy forecast that the sector could account for 10% of China’s GDP by 2020.

In China, almost anything can be rented for a short period of time: umbrellas, portable power banks, basketballs, washing machines, karaoke booths and more.

One of the most visible symbols of the sharing economy in China has been the bicycle. Internationally known companies Ofo and Mobike became unicorns and came to dominate the Chinese market. According to The New York Times, the two companies together handled 50 million rides per day in 2017.

Remaining in the shadow of the two market leaders was Hello Bike, backed by Ant Credit, effectively part of the Alibaba ecosystem. Hello Bike chose to begin by deploying bicycles in second- and third-tier cities before gradually moving into China’s largest cities: Beijing, Shanghai, Guangzhou and Shenzhen.

The increasing pace of life and the rising value of time have pushed Chinese consumers toward faster forms of urban mobility. Every morning, hundreds of people rent yellow or orange bicycles to get to subway stations. Using a bicycle for trips of 1–5 km has become part of everyday life in China.
For a time, the future of Ofo and Mobike looked promising. However, high maintenance costs, vast piles of unused bicycles, vandalism and theft prevented the companies from becoming profitable.

Only a few years earlier, the sector had been highly competitive, with around 60 companies operating in the market at one point. By 2018, however, the market was already consolidating. Mobike was acquired by Meituan Dianping, while Ofo, after a long struggle to remain independent, became part of Didi.

Chinese experts and investors are therefore searching for a new product that could become a mass-market hit almost overnight. Is there another mode of transport in China capable of rivaling bicycles in popularity?
One alternative could be scooters.

In the United States, scooters are already widely used. Their popularity is reflected in major investments in the sector: bike- and scooter-sharing company Lime raised USD 335 million from GV and Uber, while its competitor Bird raised USD 300 million from Sequoia Capital. Both companies had already achieved unicorn status.

What about scooters in China?

The market is still at an early stage and is only beginning to take shape. Chinese consumers use electric scooters produced by Xiaomi and other companies, but they have not yet become a mass-market phenomenon.
Experts assessing China’s scooter-sharing market, particularly the electric scooter segment, identify several barriers to its development:

Conventional non-electric scooters, however, may still have potential in China. They can be used on roads and sidewalks, are easy to carry and relatively inexpensive to manufacture.

Companies would nevertheless have to address the risk of theft and vandalism, as happened with shared bicycles. This would require effective maintenance, tracking and storage systems.

At first glance, the Chinese market does not appear particularly welcoming to scooters, but companies may need to adapt their business models.
One example is the Russian company Samocat Sharing, which has been successfully developing its project in Europe and Russia. According to a Mail.ru ranking, the project was included among the Top 10 most promising Russian startups.

The company operates a combined business model: in addition to renting electric and conventional scooters, it also offers scooter stations for sale. This allows individuals or companies to launch their own scooter rental businesses.

It is still too early to say whether Samocat Sharing could enter the Chinese market without difficulties. However, the company has an opportunity to become one of the first players in this enormous market — an advantage that can be particularly important for technology projects.