The sharing business, known as sharing economy, has had a major explosion in recent years with bets like Uber, Airbnb, as well as the large number of proposals for the rental of bicycles. This has caused several startups to come up with the next big business based on this model.
‘Sharing E Umbrella’ is a China-based company that started with the umbrella rental business in 11 cities in the country, an interesting project that sought to replicate the success of Mobike, which is dedicated to the business of shared bicycles and which is used in almost all the country. What was not expected is that within a few weeks of having started, almost 300,000 umbrellas have not been returned.
The Shenzhen-based company started in April 2017 under the idea of “everything on the street can be shared”, with an initial investment of 10 million yuan with which they purchased the umbrellas. They also developed an application for smartphones and looked for areas to place the umbrellas, mainly at train and bus stops.
The user must register in the application and pay a deposit of 19 yuan ($ 2.8), while the fee is only 0.50 yuan for every 30 minutes of use. The bad news is that most users have decided not to return them, which is putting the future of the newly formed company at risk.
Curiously, Sharing E Umbrella is not the first company that seeks to share umbrellas, since to this day there are 14 other startups who came up with the same thing, and in all cases the risk is the same. Each lost umbrella represents for the company a loss of almost 60 yuan, since each article requires the printing of a QR code and an electronic lock, in addition to the advertising that each carries and that serves to maintain the business.
Zhao Shuping, CEO of the company, says they will not give up and by the end of the year will add 30 million new umbrellas, seeking to give new impetus to the business. It should be noted that these losses are not exclusive to umbrellas, but have also occurred with the rental of mobile chargers and even bicycles. This has meant that, for example, Wukong Bicycles decided to leave the business after only six months of operation, after 90% of their bikes were never returned.