Impacts of the sharing economy

Sharing economy is an inevitable trend

According to statistics, despite the fact that the current “surplus resources” are estimated at £3.5 trillion ($3.9 trillion) in the world. However, there are 40,000 deaths every day due to a lack of food, clean water, and adequate housing. Another study also clarifies that car sharing can help reduce carbon emissions by 37 per cent.

'Sharing” is becoming a global keyword, and the sharing economy is a technical term mostly used by developed countries. Although the phrase has been known over two decades, it was not until as recently as 10 years ago that the sharing economy had its chance to boom and gather attention with its tremendous benefits for the market, economy, consumers, as well as governments in every country.

What could the sharing economy offer the economy?

According to a study conducted by audit company PricewaterhouseCoopers (PwC), sharing economy business models have the potential to increase global revenue by around $335 billion by 2025. In the United States, the total value of brands enjoying the benefits of the sharing economy reached $463.9 billion in 2018, which accounts for more than 3 per cent of the US GDP. Besides, according to the survey of the official English-language website of China News Service (ECNS), the scale of the sharing economy in 2015 in China has exceeded ¥1 trillion($152.8 billion). Similarly, the Chinese government also expects the sharing economy to occupy 10 per cent of the Chinese GDP in 2020.

Based on statistics from the Sharing Economy Association of Singapore (SEAS), it is estimated that the sharing economy helps the Lion Island save about $25 million a year. Referring to “the sharing economy” model in Southeast Asia, it is difficult to ignore Grab. According to the Strait Times, Grab contributed $5.8 billion to the Southeast Asian economy in the 12 months as of March 2019.

As one of the fastest-growing and the most powerful economic models in history, the sharing economy is contributing to the sustainable growth of the world economy.

The sharing economy is a “life-jacket” by creating more jobs, optimising human resources, and reducing unemployment

The impact of the sharing economy on the market, consumers, and governments

In addition to the positive contributions to the economy, the sharing economy also utilises surplus resources in every nation, maximising the efficiency of resource use. At the same time, in some developing countries, the sharing economy is truly a “life-jacket” in creating more jobs, optimising human resources, and reducing unemployment, especially for low-skilled workers. According to a report cited by the Straits Times, Grab contributed greatly to Southeast Asia’s economy through driver, delivery, merchant, and agent incomes and sales.

Besides, in the 18 months between March 2018 and September 2019, Grab has empowered the number of micro-entrepreneurs by more than three times, from 2.6 million to over 9 million (this means that approximately one in 70 people in Southeast Asia have earned an income through the Grab platform). Furthermore, the Moca wallet on the Grab app makes fast, convenient cashless payments while remaining secure, thereby optimising user experience.

Moreover, the sharing economy with its outstanding traits would diversify the market and enhance competition. It would revise the deep-rooted rules of the game. When businesses enter the market through operating under the sharing economy model, applying advanced technology to the business, and mastering the game, the businesses that are still operating and trading in traditional ways must embrace changes and keep up with trends. This not only fosters competition between businesses but also dramatically elevates the economy.

From customers’ perspectives, consumers nowadays have more choice in terms of products as well as services for themselves and are more often opting for superior quality assurance, while prices are becoming more affordable due to the fierce competition between businesses.

At the state level, the sharing economy also brings remarkable advantages. In Vietnam, the growth of the sharing economy could also help adapt to the major changes shaping the global economy, maximising the productivity in all resources. Besides, the sharing economy also leverages the application of advanced technology towards making a fundamentally industrialised country in the direction of modernisation, adapting to the rise of Industry 4.0, while strengthening the local economy and contributing to the country’s economic growth.