Who could’ve possibly seen this coming?
Hoping to capitalize on the burgeoning sharing economy, a Chinese start-up company lost almost all of its wares within weeks of opening up shop.
E Umbrella, which opened up operations in eleven different Chinese cities, is now without umbrellas to “share”.
The problem wasn’t so much renting the umbrellas, it was finding a good place to return them, says E Umbrella. Even though most umbrella renters decided to keep them, rather than bothering to “return” their rented goods.
The Shanghaiist reported:
The Shenzhen-based company was launched earlier this year with a 10 million yuan investment. The concept was similar to those that bike-sharing startups have used to (mostly) great success. Customers use an app on their smartphone to pay a 19 yuan deposit fee for an umbrella, which costs just 50 jiao for every half hour of use.
According to the South China Morning Post, company CEO Zhao Shuping said that the idea came to him after watching bike-sharing schemes take off across China, making him realize that “everything on the street can now be shared.”
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.”
The SCMP reports that 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.
E Umbrella was supposed to be the hottest addition to China’s sharing economy, which explains why the company was able to rake in so much investment capital:
Venture cash is rushing into China’s nascent but diverse sharing economy, providing tens of millions of yuan in recent months for startups focused on shared bikes, power banks, basketballs and even umbrellas.
Umbrella-sharing app E-umbrella became one of the latest favorites of venture financiers after raising 10 million yuan ($1.5 million) this week, just a week after its first batch of 30,000 rain-protection products hit the streets in Shenzhen, a southern Chinese city where downpours are common from May to September.
The company’s rainbow-colored umbrellas can be found hanging from roadside fences. Each has a coded lock that, whenever it starts to rain, can be opened with a swipe of a QR code by passersby with smartphones. Customers pay a 19 yuan deposit and 0.5 yuan per half-hour of use.
Another umbrella start-up, Molisan, tested the market in Guangzhou with 1,000 umbrellas. Unlike E Umbrella, Molisan stores their umbrellas in cabinets when the weather is dry. Molisan representatives claim they’ve only lost 8 of the 1,000 umbrellas. Even with such small losses, they’re considering doubling the rental deposit to further discourage theft.
As for E Umbrella? Zhao remains undeterred and plans to release another 30 million umbrellas by year’s end.
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