“The miracle is this – the more we share,the more we have”
It is as though Leonard Nimoy, well-known for his iconic role in Star Trek and much lauded author, said these words as if predicting the definition of the Shared Economy. In 2015, the term ‘shared economy’ made it into the Oxford dictionary, officially validating it as a phenomenon that is here to stay. Picking up from where we left off in the last issue of ‘Hospitality Matters: The consumer revolution led by mass affluent’, we venture a look into the concept of the Shared Economy.
So what exactly is shared economy? In the last century, owning goods and services was a mark of wealth. The more things you owned, the more services you could buy and therefore the wealthier you were. As time progressed, manufacturing became cheaper and as a result, more people were able to afford more things apart from basic necessities. Today, even those who live below the poverty line own plenty of things, completely throwing off the notion that ownership signifies wealth. So what happens when ownership no longer equates to wealth? Consumers begin to seek access to goods and services as opposed to ownership for many of the following reasons.
Firstly, the shared economy allows the mass affluents to be what they are – affluent as a mass. By sharing goods and services, mass affluents have catered to themselves by reducing costs of almost all common goods and services because the investment is divided among their peers. Participating in the shared economy makes it possible for people to earn extra income on the side by sharing goods and services that they have invested in while dividing financial investment of goods and services overall. Women today no longer dream of wearing designer labeled dresses, shoes and jewelry to parties, they now have direct accessibility to rent them out for short periods. People no longer have to make large investments in cars, hotels and and other luxuries as they can simply just share them for a fee through spaces such as Uber, Airbnb, and other innovative platforms. Are we moving to a culture where we don’t need ownership of clothes, homes, appliances or cars?
In addition, as more and more of the young generation aspire to be environmentally responsible, they have begun to implicitly place their faith in the shared economy. It is an obvious observation that there are many ecological benefits of sharing. Simply put, if demands of new goods go down, carbon footprints also decline. Staying in homes available on platforms such as Airbnb reduces the demand for hotels, tool sharing reduces the demand for the purchase of new tools, car-pooling reduces the demand for vehicle purchases and in turn resolves the concerns of carbon-emissions and overcrowding and not to mention, allows for an efficient use of resources while minimising waste.
Finally, the faith in the shared economy is often backed by the generation’s commitment to social transformation. Many young people today are highly critical of capitalism and are strong believers of ideological notions of equality, diversity, communication, and most importantly – the foundation of trust to reclaim humanity and human relationships. Many of you may wonder, what shared economy has to do with humanity and relationships? – More than you think. The key to the shared economy is putting your trust in complete strangers. It is this intangible trust built on digital platforms that has become a brand in itself. It represents a new economy and a new world. Sharing, collaboration, partnership and faith are all words that can be associated with the shared economy while reputation and trust are the world’s newly emerging currencies. In this day and age where the world continues to struggle with racism, inequality and prejudice, the value that the shared economy instills in its participants is extremely cherished. Users are sharing their goods and services with people regardless of race, gender identities, backgrounds, religious beliefs and other prejudices making way for a, harmonious society.
The shared economy is not here only to serve as a tool to re-instil the values of humanity, it also means business. The shared economy has emerged as a key driver of economic growth in Asia and around the world. According to PwC, the world’s top shared economic sectors could potentially generate around $335 billion(USD) in revenue by 2025 with Asia in the forefront of this growth. Market intelligence firm, Nielsen found that 78 percent of people in the Asia Pacific region are more willing to share resources. In 2012, the South Korean government declared Seoul as the “Sharing City” of the future, making it perhaps the most progressive Asian nation in the shared economy space. With increasing evidence that the shared concept is gaining traction in other parts of the Asia, seeing as how changes in income levels in Asia have created a class of consumers with higher incomes many of whom are focused on reaping personal experiences, are forecasted to be those who will drive the shared economy in full acceleration in the coming years.
The hospitality industry is not excluded from the sharing phenomenon. With an increasing number of people able to travel, credit to the affordable access of shared goods and services, the hospitality industry will be presented with incredible opportunities to jump onto the shared economy bandwagon and carve its’ own special place on it. Many hospitality service providers are apprehensive about the impact of shared economy, concerned with the popularity of services like Airbnb and the threat it poses to the hotel and restaurant industries. However, like we do at Soho Hospitality, I like to find the silver lining in every cloud. In this case particularly, I see more opportunities than threats.
For years, hoteliers and restaurateurs have traditionally relied upon marketing tools, services and price-points to remain competitive. Today, however, the competitive edge goes far beyond the best room rates and pretentious fine-dining establishments. Today belongs to those who effectively understand the mindset of new-age consumers. Cheaper price tags on rooms and restaurants are no longer the only things driving guests to make their choices. Instead, it is the overall experience and value for money that is the drawing point. Consumers today are looking for original and unique experiences during their travels therefore this is a change in mindset that the hospitality industry needs to embrace to remain relevant and leading.
Soho Hospitality is not just in the business of restaurants – we are in the business of storytelling. Whether it be the unique blend of Peruvian/Japanese cuisine on the park themed rooftop of Above Eleven or the modern-twist of Indian cuisine and cocktails served in the stunning interiors of Charcoal Tandoor Grill & Mixology, the customer journey and experience is a critical success factor of our establishments. Furthermore, we are continuously exploring ways in which we can contribute and foster the philosophy of the shared economy, both as a company and community of employees. Sharing means less wasting, greater efficiency and better utilization of resources. Finally, it benefits the environment, one of the greatest concerns of our time.
Mass Affluents have birthed contemporary ideas and philosophies that are altering our economy and our world as we know it through phenomenons that are both better for the individual and better for the world as a whole. Tech Street Journal’s blogger, Lauren Baxter perfectly articulates – “Connection is at the heart of humanity, and it is a humanness that we had lost somewhere along the way. The collaborative economy is reigniting this flame and by placing value in personal relationships rather than empty transactions, kindergarten teachers across the world can continue to sing out in glorified unison, sharing is caring”. It is important to remember that this is merely another step in the larger consumer revolution, who knows what lies ahead … the revolution is far from over.