The Sharing Economy is an economic model that emphasizes collaboration and sharing rather than solitary growth, creating new products and services that meet the broad needs of people.


When we talk about the Sharing Economy, some may not be familiar with the term. However, if I mention well-known businesses like Grab, Uber, Airbnb, Hubba, Line, and Joox, many can probably visualize what I mean. Today, I, Thakorn Piyapan, Chairman of Krungsri Consumer and Executive in Digital Banking and Innovation at Krungsri Ayudhya Bank Public Company Limited, would like to introduce everyone to the Sharing Economy in more detail.

What is the Sharing Economy?
The principle of this business model is to collaborate in conducting business through the goods or services of one party via the platform of another. A prime example of a startup that has developed this concept into a well-known business across Thailand is Grab, which serves as a platform for various types of ride-hailing. The company does not own any vehicles but acts as an intermediary, providing information about who needs services and who can offer them. This type of business has gained immense popularity in an era where the internet is flourishing, and everyone is becoming more accustomed to the digital world.
Who benefits from the Sharing Economy?
First, let's categorize the groups involved in this economic model.
The first group is the platform creators.

This group benefits by utilizing resources they do not own to generate income, simply by establishing a good system that considers both service users and providers, positioning themselves appropriately. For example, in delivery services, you don’t need to hire a full-time delivery employee, which incurs monthly costs; instead, you can hire someone on a per-delivery basis with appropriate compensation.


The second group is the service users.

This group gains increased variety along with other benefits offered by the platform creators. For instance, if I want to travel and don’t want to stay in the same hotel, I can use an app that aggregates hotels in the area. The app allows me to filter accommodations based on my preferences, whether it’s a 4-5 star rating, budget constraints, or specific features like large balconies and complimentary breakfast. Plus, I can earn points to redeem for discounts on future bookings.

The third group is the service providers.

This group is somewhat similar to the first but in reverse. They have products to sell but lack a venue. For example, Mr. Bee owns a famous restaurant in the area but wants people from other locations to try his food. However, he is not ready to open additional branches or hire delivery staff. So, he lists his restaurant on a food delivery platform. When someone orders his food, the platform notifies him to prepare the order, and a delivery person picks it up and delivers it. Mr. Bee can sell his food without bearing the costs of expanding his business or hiring permanent delivery staff.

I see the Sharing Economy as a mutually beneficial relationship. If we were to reference a Thai proverb, it might be "water relies on the boat, the tiger relies on the forest," but in a win-win manner, as all parties gain income and benefits.

Examples of Sharing Economy in Thailand and abroad
Currently, it’s rare to find someone who hasn’t heard of Grab, as it has become an alternative for those needing transportation but may not be able to drive, have no vehicle, or find it inconvenient to drive. Simply open the app, select the starting and destination points, and the system calculates the total fare. When requesting a ride, we can also see the driver's history, which provides reassurance to many users. Upon reaching the destination, we receive a receipt and can rate the driver from 1 to 5 stars. Additionally, there are discounts and special privileges for both drivers and passengers.
 
On a global scale, it’s impossible to discuss the Sharing Economy without mentioning Airbnb. They have established a unique system. When we think of vacation accommodations, hotels are usually the first thought. However, Airbnb has changed the perspective on lodging, allowing travelers to stay in tents, lighthouses, treehouses, or even other people's homes! This may sound scary and unsafe, but Airbnb has addressed these concerns by creating a system that screens homeowners and provides rating information and reviews, allowing travelers to verify that they are booking with trustworthy hosts.
Factors that enable the Sharing Economy to thrive and succeed

I believe that the users of this service are a key variable. If there are service providers and a good platform but no users, the business cannot progress. So, how do we attract users? We need to build trust. We must make users feel that by using your platform, they gain more than what they previously experienced. This could involve offering special privileges, convenience, and, importantly, trust. Once users feel confident in your platform and safe to use it, and if you impress them with your service, you will surely gain customers continuously.


For the platform and service providers, I believe you need to have discussions to determine what is mutually beneficial for both parties. After all, both sides must rely on each other for a long time. If everything runs smoothly, managing and establishing internal systems is also crucial. For instance, setting up financial systems and managing expenses is important. If the process takes too long, requires numerous documents, and involves many steps, even payment and settlement can become a bottleneck for the business. For anyone interested in the Sharing Economy, I recommend studying PromptPay, as both parties can transact and make payments online through this single platform, which is convenient, fast, and secure. Finally, if you have an innovative idea, don’t hesitate—take action now!
 
Plearn by Krungsri GURU and I, Thakorn Piyapan, wish you all the best.

SOURCE: www.krungsri.com