Trend report of Japanese sharing economy

March 15, 2019

Sharing Economy is the economic system in which assets, services, time, skills or transportation are shared between private individuals, either free or for a fee, typically by means of the Internet.

 

 

The market size of the domestic sharing economy in Japan continues to rapidly expand. Cabinet office did a trial calculation the market size in 2016 and it was about 525 billion yen. The breakdown of each fields are:

  • 300 billion yen (things)

  • 140-180 billion yen(space)

  • 15-25 billion yen (skill and time)

  • 10 billion (asset).

According to Yano Research Market solution provider, the market scale will expand.

 

In particular, the field of the sharing cycle has been expanded rapidly since the beginning of this year. For example Ofo from Singapore expanded their business to Japan or  Japan’s Mercari forayed into bike-sharing service, Mercari. Municipal governments are also trying unique approach to the matter, so it is certain that it will have big impact on economy next year.

 

Here is the main sharing economy in Japan.

 

 

 

Now, Mercari is most attractive company in this area. In the domestic flea market app field or e-commerce between private individuals, what is called CtoC market, Mercari is exceptional.

 

 

Mercari’s  gross merchandise sales (GMS) totaled 230 billion yen, a 76.9% Quarter over quarter (Q/Q). That figure is dramatically increasing. Mercari’s business model is matching platform model. It provides the platform meeting users and provides platform matching between a product or service provider and a user. In the case of Mercari, it mediates between people who want to exhibit and people who want to buy, then Mercari makes a profit from commission. 

 

 

Compared to the other existing competitors like Yahoo Auction, Mercari has a lot of merit. For example, it doesn’t need to registration fees. Even a woman can exhibit easily. The rotation is good. And people can easy to browse the app with the similar feeling of looking at the bulletin board or SNS. So it has established a unique position and could become a booming business.

 

 

However, when it comes to the whole sharing economy business, we would have to say Japan is very much behind in those fields. According to the survey by Timbro, which is the biggest think tank in North Europe, Japan is the 91st in the scale of the sharing economy. And Top 5 are Iceland,Turks and Caicos Islands, Montenegro,Malta and New Zealand.

 

 

What are the reasons behind lack of progress in the sharing economy? There are a number of reasons. According to the survey by Ministry of Economy, Trade and Industry, one of the biggest reason is anxiety for troubleshooting. And inadequate insurance and compensation systems, regulations by laws and frictions with existing companies, digital divide, and resistance to sharing are also reasons.

 

 

For example, Uber which is the biggest ride sharing company, decided to turnaround Japanese market. For the moment, Uber  can’t  use the private car and  has a limited operation in Tokyo for hailing licensed vehicles and a food delivery service. This is because the Japanese lows ban the taxi without licence, and the taxi industry didn’t  really want to relax the regulations to protect their vested interests.

 

 

The government set up the sharing economy promotion committee which has provided information,  established consultation services, taken up self regulation, and introduced best practice. Then since 2016 the government started the sharing economy review session under the Government CIO. Based on those argument and situation, they started Sharing economy promotion program which included necessary measures.

 

 

For the local side, with decreasing birthrate and aging population, there are a lot of problems about employment creation, an increase in nonresident populations and means of  transportation for elderly in depopulated areas. Sharing economy has a potential to solve those regional challenges. So, government is going to proceed with the project by collaborating with the local government, make the business best practice and dispatch people who know well about sharing economy.

 

 

 

(Reference)

https://sharing-economy.jp/ja/

https://wisdom.nec.com/ja/business/2018071806/index.html

http://www.kokusen.go.jp/wko/pdf/wko-201801_02.pdf

https://timbro.se/allmant/timbro-sharing-economy-index/

http://sharing-economy-lab.jp/share-problem-solution

https://blogos.com/article/308222/

https://unlimited-journal.com/business-model/612/

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