China has enjoyed several sharing startups like Mobike (a bike-sharing company). Because of this, there is very little wonder that there are several other startups that tried to get in on the action. One of these startups is Sharing E Umbrella.
Their gimmick was was shareable umbrellas. It seemed like a good idea until they had announced that they had lost almost all of its 300,000 umbrellas. The Shenzhen based company was launched earlier this year with a 10 Million Yuan (nearly $15,000) investment. Their customers would use an app on their smartphone to pay a 19 Yuan ($3) deposit fee and will cost them around 50 Jiao ($7.50) for every half hour of use.
The company CEO Zhao Shuping said that the idea came to him after watching bike-sharing schemes take off across China, making him realize that pretty much everything could be shared.
A lot of different companies have been able to take advantage of China’s sharing economy craze. The biggest ones were Uber and Airbnb made massive success in the Middle Kingdom. With the help of mobile wallets and barcode scanners, Chinese residents can now rent anything from bikes to basketballs and even cellphone chargers. Naturally, this has attracted many tech startups to experiment in Chinese urban centers; however, some ideas have turned out better than others.
While Sharing E Umbrella gave out their umbrellas at train and bus stops, they soon realized that getting users to return the umbrellas would be a problem. “Umbrellas are different from bicycles,” Zhao said. “Bikes can be parked anywhere, but with an umbrella you need railings or a fence to hang it on.”
Zhao concluded that the safest place for an umbrella would be at the customer’s home, where it would be safe and undamaged. But, apparently, customers have skipped the final step of then returning the umbrellas, simply keeping them for themselves. Each lost umbrella costs the company 60 yuan to replace, but Zhao has not yet given up hope. He reportedly plans to release another 30 million umbrellas by the end of the year.
Sharing E Umbrella, along with its 14 other competitors in the umbrella-sharing industry, might face even more problems as the weeks turn into months. For a business that depends on rain, finding a steady profit might prove challenging. China receives the most rain in the summertime, leaving little interest in the business during drier months. What’s worse, in regions with frequent rain, people are more likely to just buy their own umbrellas. Umbrella renting schemes aren’t the only sharing businesses suffering from problems with theft in China.
Last month, shared-bike startup Wukong Bicycles went out of business in Chongqing after nearly all of its bikes were stolen following just six months of operation. Shortly afterwards, Beijing-based 3Vbike followed suit after their stock of bikes was reduced to just a few dozen.
So even though it would be nice to grab an umbrella when walking home in a downpour, one thing seems clear: if sharing economy companies don’t change the way that they keep track of their products, they won’t stick around long — whether it rains or not.