Sharing Economy Blooms

Venture cash is rushing into Chinas nascent but diverse sharing economy， providing tens of millions of yuan in recent months for startups focused on shared bikes， power banks， basketballs and even umbrellas.

Umbrella-sharing app E-umbrella became one of the latest favorites of venture financiers after raising 10 million yuan （$1.5 million） this week， just a week after its first batch of 30，000 rain-protection products hit the streets in Shenzhen， a southern Chinese city where downpours are common from May to September.

The companys rainbow-colored umbrellas can be found hanging from roadside fences. Each has a coded lock that， whenever it starts to rain， can be opened with a swipe of a QR code by passersby with smartphones. Customers pay a 19 yuan deposit and 0.5 yuan per halfhour of use.

The startup plans to roll out some 30 million umbrellas both at home and abroad this year.

E-umbrella isnt the only company capitalizing on umbrella demand. Another， called Chunsun， which translates as “springtime bamboo shoots，" secured 5 million yuan in late May with the goal of launching its business in June.

The nations first umbrella startup， Molisan， rolled out 1，000 umbrellas in March in the city of Guangzhou， near Shenzhen. Unlike its competitors， Molisan uses cabinets to store streetside umbrellas between rains.

The umbrella trend mirrors the shared-bike wave that sprouted when Mobikes rentable bicycle wheels started spinning in Shanghai in April 2016. Today， the company is one of several riding the wave in each of Chinas first- and second-tier cities.

These young business-models have endured growing pains， worrying entrepreneurs and urban regulators. Unruly shared bike riders， for example， have been faulted for violating traffic rules， parking in forbidden areas and stealing units by breaking bike locks. Governments in cities such as Beijing， Shanghai and Tianjin have started to more closelyregulate the rent-a-bike industry.

Startups tapping consumer demand for umbrellas have also drawn concern， particularly since stealing them could be relatively easy.

But a Molisan representative said that among all the umbrellas his company had set out through March， only eight were not returned. The representative， surnamed Chen said that to discourage theft， the company may adjust the deposit rate， which is now up to 30 yuan – an amount roughly equal to the cost of a typical umbrella.

Another possible challenge is low profitability. Most sharing economy startups have been relying on investments rather than revenues. Some are not even sure whether with rental charges they can make ends meet over the long term， said Deng Sha， an analyst at the Shenzhen-based Forward Industries Institute.

Nevertheless， startup entrepreneurs have found that the sharing economy can support a variety of goods， including cars， portable chargers and basketballs. Some have even found a way to share office work-spaces.

U.S. coworking space giant WeWork is benefiting from the wave， to the delight of the companys APAC Managing Director Ole Ruch.

"Im very impressed by Chinas sharing economy development，" Ruch said. "Ive never seen such a dynamic market where you can share everything from bikes to power banks， spaces， cars..."

WeWork， which expanded into China last year and now operates six divisions in Beijing and Shanghai， is standing up to fierce competition from companies such as Naked Hub， which was founded by expats in Shanghai， and a company called URWork， which recently merged with Hongtai New Space and in late May announced the raising of nearly 400 million yuan（$58 million）.endprint