Can collaborative consumption also benefit product manufacturers?

The growth of collaborative consumption (also known as the sharing economy) as a trend, is often associated with start-ups and individual entrepreneurs, and the benefits are considered from an individual user (formerly consumer) perspective. However, a new report produced by researchers in the United States and China has found that there are significant profit-making benefits for manufacturers that adjust prices and product design to fit in with sharing behaviour.

Photo credit: reynermedia via / CC BY
Photo credit: reynermedia via / CC BY

Enabled by digital technology, sharing marketplaces are becoming increasingly common for a large range of goods including cars, bicycles, agricultural equipment and much more. Fast and easy exchanges are made possible between multiple users, usually at reduced costs compared to purchasing new products outright. However, the benefits stretch beyond individual customers and to manufacturers, according to a new report, “Collaborative consumption: Strategic and economic implications of product sharing”, produced by marketing and finance professors from Washington University, St Louis and Shanghai University, China.

The research analysed and explored the impact of peer-to-peer product sharing on a range of manufacturers. It concluded that there were two main effects caused by collaborative consumption, one where consumers buy less because they have the option of sharing, but another where more purchasing is enabled because costs are cheaper, and indeed an individual asset can become more valuable if there is the option of leasing it out or sharing it.

Photo credit: Mic V. via Visual hunt / CC BY
Photo credit: Mic V. via Visual hunt / CC BY

An example offered in the report is of people who only use a car at weekends because travelling by bus to work is far easier. In the sharing economy context, the ability to use a car that would otherwise be unused at the weekend, or even the potential to lease out a vehicle during the week, could enable new purchases, as well as asset maximisation.

In the automotive sector, many incumbent manufacturers are adjusting their business models and vehicle design to better suit renting, sharing and leasing activities. The full research report is available for download.

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Seb Egerton-Read

Seb Egerton-Read

Seb writes daily content for Circulate across the full spectrum of the website's topics. Previously he has spent five years as a freelance writer for a number of websites and blogs. You can e-mail Seb at seb[at]

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