UK ‘sharing economy’ gaining widespread momentum – report

A new study by Crowd Companies and Vision Critical has found that the collaborative economy is becoming an increasingly important sector for consumers and is set to grow, with 23 million sharers already estimated in the UK.

In the first large-scale study, more than 90,000 people were asked about their participation in the collaborative economy in the UK, US and Canada.

The collaborative economy, also known as the sharing economy, involves consumers sharing goods and services. For example through selling pre-owned items, car sharing, swapping homes and even borrowing money from each other.

The internet and social media has made this economy much more prevalent with easily accessible sharing sites and is thought to be one of the reasons for the large amounts of consumers.

Funding Circle is a peer-to-peer lending online marketplace. Individuals and organisations can lend directly to UK businesses. The aim is to allow businesses to access finance and to help people get a good return.

A spokesperson for Funding Circle said, “Funding Circle is trebling year on year. Our active investor base of 30,000 people has lent £290m to over 5,000 small businesses since launch in 2010. 

“On the investor side, the average net return is 6.1% after fees and bad debt, making it an attractive investment. Investors are able to diversify their risk and spread their lending across hundreds of businesses, lending as little as £20 to each one. 

“Foundation Capital recently predicted that marketplace lending could become worth $1 trillion by 2025.”  

The report found three different groups of people involved in this new marketplace: ‘non-sharers’, who don’t engage but many intend to in next 12 months; ‘re-sharers’ who buy or sell pre-owned goods using well established services such as eBay; and ‘neo-sharers’ who already use emergent sharing services such as Etsy, Talkrabbit and Kickstarter.

Although sharing within society is of course not a new concept, it has become more widespread. The report describes three main reasons for this, one of which are “societal drivers” such as public concern about environmental sustainability and the factors that lead them to take part in the sharing economy.

Some say ‘generation Y’ has a larger sense of personal responsibility and recent surveys have also shown a move towards companies who are more sustainable.

Other factors include “economic drivers” due to the rising costs of production, difficulty gaining finance and interest in new sources of income.

“Technological drivers” lead the way with the sharing economy with mobile devices, apps, social media facilitating and encouraging collaborative consumption.

As consumers become aware of this ever-growing marketplace companies need to start thinking of ways to get involved with this new economy.

In a recent Blue & Green Tomorrow article, author Anna Simpson spoke about what customers really want. She suggested brands need to respond to customers with integrity and by finding out what is really important to them, rather than the old “take, make, dispose” model.

Photo: Carlos Maya via Flickr

Further reading: 

70% prepared to boycott brands with poor environmental records

Understanding desire: how brands can respond to what people want

People love brands but wouldn’t care if 73 disappear tomorrow

Sustainable living: myths, meanings and realities – review

The Guide to Sustainable Spending 2013