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Can shared consumption pick up locally?

The increasing popularity of the likes of Uber and Airbnb has brought on new waves of hype surrounding collaborative consumption made possible through online platforms and mobile technology.  While this is a growth market for companies in the West, is this trend as prevalent in Hong Kong?

Accommodation

Marketing spoke to a landlord and Airbnb user who chose to remain anonymous.  He is a lawyer who has placed a two-bedroom apartment in Wanchai for short-term renting on the platform.

The lawyer does not have a roommate and leaves the spare bedroom available for family and friends traveling to Hong Kong to stay in.  Putting the bedroom up on Airbnb allows him to maximise the use of the room when no one is occupying it.

“They aren’t here all the time so it helps me make and save money.  It’s better than having a housemate because I can set up the place up however I want and if I am annoyed with the person living here, they are gone in a few days,” the lawyer said.

From the perspective of tourists, they also make cost-savings while being able to live in the most convenient locations in town.  Most of the lawyer’s guests come from North America and Europe.

“For my guests, Airbnb is price-driven – it’s cheaper than a hotel and it offers convenient locations so it’s high on their list for accommodation,” the lawyer said.

He admits there are legal issues involved where the rental agreement does not have clauses allowing for short-term rental and the landlord is still responsible if anything happens if he or she or the tenant brings strangers into the flat and the apartment building.

However, he believes it’s time for the law to keep up with the times.

“Short-term accommodation is not registered in Hong Kong.  Laws are often too conservative and behind the times and this is a prime example of that,” the lawyer said.

Shared accommodation is something that he sees growing in Hong Kong in the future whereas shared consumption of other types of goods might not grow as quickly.

“I see Airbnb getting bigger in Hong Kong in the future, because the city is a tourist and transportation hub with high hotel rates.  You will get travelers from mainland China, Europe and North America,” the lawyer said.

“But majority of the population right now are not using Airbnb or other forms of shared consumption.  I don’t really see a lot of collaborative consumption going on with cars and personal goods in Hong Kong.”

Transportation

One of the world’s fastest growing companies for shared car rides is Uber, while on the goods transportation front, a local start-up active in this is GoGoVan.

Sam Gellman, general manager at Uber Hong Kong, does not see Uber as fitting into the shared consumption model since it is not a peer-to-peer service in Hong Kong and instead connects passengers with licensed limos driven by professional drivers.

However, Uber is a service that maximises the time spent by these limos being idle in parking lots or driving around without passengers on the street.

“Collaborative consumption is about using resources when you need them, not having to own something in order to use it yourself.  If a company can come in and increase the utilisation of cars, some people may no longer need to own a car.  Cars that are owned can go as far as possible, lowering emissions which are bad for the environment,” Gellman said.

What’s in it for Uber?

Gellman said, “As our user base grows and more people use Uber and we have built a huge platform that people trust, at that point, we can take a small commission.”

As for transporting goods around Hong Kong, GoGoVan is a local start-up that tries to make the most out of a van’s idle time and has over 20,000 transactions per day.

Steven Lam, co-founder and CEO at GoGoVan, said, “Sharing is a trend in the world and Hong Kong is five to ten years behind.  We need more time to accept collaborative sharing models such as sharing accommodation through Airbnb.

“It takes time for policy to keep up with this and currently, government regulations make it harder to do this type of sharing.”

He said when his company was founded by five people in 2011, it operated like a call centre for vans and represents the first-generation of the sharing economy.

Today, mobile technology is allowing people to share information, driving competition in a range of industries at a rapid pace.  GoGoVan’s founders took just six months to set up the platform and are building customer loyalty and market share before they will start charging drivers for the service.

“You might think Airbnb and Uber are new but people are already very dependent on their smartphones – some people would go crazy if they didn’t have their smartphones by their side.  All of their information is stored there and we are simply meeting this type of demand,” Lam said.

He predicts the shared economy will become increasingly competitive across industries and mainland China is ahead of Hong Kong in terms of collaborative consumption, where sharing restaurants and cleaning services after connecting people using online platforms are becoming mainstream.

Co-working spaces

Wynd is a co-working space in Central that opened in September 2013.  About a year later, the co-working space added seven private offices to its portfolio of services which include hot-desking and daily passes.

Majority of its clients are expatriate business owners, with 35% coming from North America, 30% from Europe.  Only 10% of its clients are local Hongkongers.  Uber Hong Kong was one of Wynd’s first clients.

For Laura Canamasas, sales and business development manager at Wynd, co-working spaces facilitate collaboration among small-to-medium enterprises and start-ups, building synergy and fostering new ideas.

“Entrepreneurs are really alone and if you work at a co-working space, someone next to you might be experiencing the same thing and you can share your experiences,” Canamasas said.

“At co-working spaces, you can meet people, learn from them and create synergies.”

Co-working spaces also allow SME owners to save on rent, investing their money in other things to grow their businesses.

A plethora of co-working spaces has been popping up in Hong Kong and Wynd seeks to differentiate itself by building a community of enterpreneurs, most of which work in the service sector such as fashion, design, digital advertising and recruitment, or are Internet entrepreneurs.

Canamasas said, “There has been a boom in co-working spaces but not all of them can survive.  We can attract a lot of SMEs and there is a lot of demand but clients usually move three to six months after joining us if everything is going well.

“That’s what we want for them – success – but we have to keep recruiting clients through running events at our space.”

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