The Sharing Economy Revolution: India Primed to Take Next Big Leap

The major side effect of disruptive technology such as smartphones and tablets is that it has made us more connected. The knock on effect of this development has been that we are more engaged than ever before – not only when it comes to our friends and family but people across the country, even halfway across the world.

?

It’s immediate, it’s powerful and it has now
given rise to what people are calling the ‘sharing economy’.


What is the Sharing Economy?


We are actually uniquely geared as a
species to share. It brings great benefits, after all. You have something I need
and I have something you need; we can swap or at least get it at a reduced
price. We don’t necessarily have to pay because we can share. We can share
creative ideas, production methods, delivery of goods, distribution networks,
or goods and services that are in high demand. There are two keys to this being
successful on a large scale.


First of all, you need the technology that
enables people to connect (in this case online and smart devices) and you need
a platform where people can go and share and connect without prohibitive
transactional costs. Put these together and you have an economic model that
anyone can engage with.


How It Will Work In India?


Whether you call it the sharing economy or
collaborative consumption, this is the biggest change in the way we buy and
sell and delivers a range of economic and social benefits that have a far reach.
While it is yet to fully catch on in India, the future for the sharing economy
does look promising. Consumers are happier to try different things and the
technology is certainly there – smartphone usage has exploded in India over the
last few years, across all demographics.


The sharing economy first became relevant
in respect of transport sharing (with apps such as Uber) but it is also
gathering pace in areas such as hospitality (for instance, finding somewhere to
stay) and food and beverages. In essence, though, it has benefits for Indian
consumers, marketplaces and suppliers that are much more far reaching.


India has some key factors in place that
mean the sharing economy is likely to take off in a big way over the next few
years. First of all, mobile usage is set to come second only to the USA and,
secondly, and perhaps more importantly, the country has a large number of young
people who are highly agreeable to change. This demographic, which makes up
almost 50% of the population, are hungry for new ways of doing things and are
more likely to engage online than their older counterparts.


This in turn is helping to create
marketplaces and drive suppliers to engage with the sharing economy. Let’s take
a quick look at the three most popular sectors:


·      
Transportation: Finding someone
online who can drive you to a destination. It’s been made popular by apps such
as Uber who have put customers and suppliers in contact with each other,
disrupting the normal transport provision of taxis, buses and trains.


·      
Hospitality: You don’t have to
book into a hotel but can rent a room or house off a private individual just by
going onto the right app.


·      
Food and Beverage: Again,
platforms put customers and suppliers in contact with each other at a much
lower price.


These on demand technologies are not only
changing the way we think but is are producing a number of other benefits. It
is easier to find good deals, one of the major governing factors in take up.
Costs are brought down so that we get products and services cheaper.


It’s also boosted an entrepreneurial state
of mind, especially in our younger population.


The Wider Impact of the Sharing Economy in
India


While the sharing economy is growing in
areas like transportation and hospitality it has much wider ramifications, particularly
in an economy such as India’s.


1.    
Better resource utilisation can
be achieved because suppliers are in tune with what customers want. The
consumer essentially dictates demand and they want more and better. It has not
only disrupted areas such as travel and hospitality, it is also causing major
changes in areas like education with Massively Open Online Courses (MOOC) where
users can access the teaching they need when they need it.


2.    
The sharing economy is already
having an impact on employment. Indians can now become self-employed simply by
joining a particular platform and offering their services. They don’t have to
go through an interview process or compete with other applicants and they can
dictate how much they earn based on how their particular industry performs.
There is not only access to crowdfunding but also the chance to begin
entrepreneurial projects for a very low start up cost – something that
previously was a big deterrent particularly in India.


3.    
The knock on effect of the
impact on employment is increased social mobility. This paradigm shift means
anyone can engage with a particular platform at a low cost and with little risk
and have a chance of success, raising their income and status. They are not
dependent on others for improving their quality of life and the support
provided and success seen with others in a similar demographic is a driving
factor for growing confidence.


4.    
The sharing economy in India
doesn’t just provide opportunities to go self-employed and improve your bank
balance. It also gives many people the chance to learn new skills and bring
them to the market place when they would not normally have had the opportunity
to do so.


One of the prime benefits of the sharing
economy for both sides is convenience. Suppliers get more customers and
customers get a much better deal. The inclusion of two way ratings on sharing
platforms means that there is also more transparency and improved technology
means that customers can see exactly what they are getting, creating an
ecosystem where accountability is at the forefront.


There are suggestions that the sharing
economy is also helping us to act more sustainability by reducing our impact on
the environment as well as improving digital literacy across the board as more
and more people in India become engaged with mobile technology.


The Future of the Sharing Economy


Of course, in India as in most other
countries, there are still some major hurdles to overcome. First of all, the
sharing economy is growing rapidly which poses problems for maintaining
consumer trust and supplier quality of service. There’s also the issue of local
regulatory considerations, security issues and tax compliance considerations.
For instance, the problem of insurance for taxi sharing platforms could well
lead to legislative complications as the need to protect consumers becomes of
paramount concern.


Despite these hurdles, the benefits of the
sharing economy to India are set to be huge and potentially life changing for a
lot of people. That’s not just for consumers and suppliers but also for the
Indian government who may have to preside over one of the biggest shifts in the
national economy.


India currently has 243 million internet
users and a penetration of just under 20%. This, like in other countries, is
growing rapidly. And it’s set to transform lives across all areas of Indian
society.  The sharing economy is here to
stay and the opportunities are there for all. It’s simply one of the most
democratic revolutions ever seen in world history.


 


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