Sharing businesses have emerged as the hot topic in the current wave of technology excitement. Start-ups are competing to be “the next Airbnb” of every industry imaginable, and are vying for the capital that label can attract.
Airbnb itself advertises three times more beds than the world’s largest hotel chain. Meanwhile, Uber has rapidly become the largest passenger transport network. Identifying sectors vulnerable to similar disruptions and understanding existing companies’ exposure and strategic responses is increasingly vital given the scale and speed with which change can unfold.
The signs of disruption are clear and fast
– Sharing businesses receive more venture capital funding than any other category, having overtaken social media platforms. The total value of sharing start-up businesses had reached $219 billion by mid-20153, with $20 billion of new capital invested in the sector in just the last two years
– Sharing revenues are set to grow at 25% annually over the next decade, and are expected to reach$335 billion by 2025, according to PWC5.
The drivers of this growth are swelling
Growing trends particularly among the younger generation – who represent the most active users of sharing businesses – serve to complement the “sharing” culture. Such trends include: access to communication technologies; increased trust and social acceptance of online exchanges and sharing; recognition of existing inefficiencies; significant savings; and flexible working patterns.
Few opportunities to invest in the theme through public equity markets
With an ability to scale with limited capital, most sharing businesses operate outside public equity markets and provide little visibility into their finances or operations. Our main focus is therefore on the abilities of existing companies to adapt and defend their competitive positions, and potentially ride the growth opportunities this presents if they are able to adapt quickly enough.
Sharing businesses pose a threat to listed companies in exposed sectors