by Bingjiefu He
Portable power banks are ubiquitous in China, and have evolved to become an everyday item in the lives of Chinese mobile users. However, the humble power bank is set to become the centerpiece of the latest craze in China’s ever-shifting startup scene, as the latest device to join the “sharing economy”.
There are 1.3 billion mobile phone users in China. Retail and information consumption have become intrinsically linked to mobile phone usage, and most business transactions are conducted through online means such as WeChat & Alipay. In short, the Chinese need their mobile phones to function, twenty-four hours a day, seven days a week. Mobile phones are now essential to the functioning of the everyday society, thus making portable power banks essential to the continuation of normality in terms of quality of life.
For instance, it can be embarrassing when you are about to pay for your lunch, but suddenly realize that you forgot to charge your phone the previous night, and that your power bank is still lying on your couch. Once your phone loses power in fact, you are cut off from your online wallet, your favorite news outlet, and your social media. These moments are precisely the reason why startups in China are spearheading the way to make power banks a part of the sharing economy, to ensure that you could charge your phone on the fly, anywhere, anytime.
Sharing economy is all the craze right now. Chinese startups are the purveyors of the bike sharing economy, with the rise of Mobike, OFO, and a myriad of other bike sharing companies. However, the market is near saturation, and competition is cut-throat to the extreme. Power bank sharing however, is a high-demand, high frequency market with low barriers of entry, providing an alternative to the bike-sharing market for entrepreneurs eager to have access to the sharing economy.
The idea is simple: users pay a deposit to rent out portable power banks at designated power bank distribution machines. The usage of said power banks are charged on an hourly basis, and users must return the power banks to the machines to get their deposit back. The idea is already taking flight, as billions of RMBs are poured into the market with big names such as Tencent and IDG Capital joining the fray. At the moment, the two biggest players in the market are Xiaobao Charging and Hippo Charging.
In the past month alone, more than 8 companies and 300 million RMB have poured into the market. Most power bank sharing startups are focusing their attention on either placing power bank rental machines, or setting up power bank charging ports at restaurants, cafes, and other public locations. The future revenue for these businesses is projected to either come from user deposits & rental payment, or from advertising on rental machines.
However, the business of power bank sharing is still at its infancy. Startups are desperate for capital to scale, and capital is eager to flow into the market in fear of missing out. With advancement in battery storage technology, concerns for security that comes with using third party hardware for charging, and questionable future profitability, it is hard to say whether power bank sharing is the future, or just another fad in China’s ever changing economics ecosystem.
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