UK’s ‘sharing economy’ could be worth £9 billion a year by 2025Follow @PwC_NI
Just five offerings from the UK’s so-called ‘sharing economy’ - could be worth £9bn a year by 2015, according to research from PwC.
Just five of the sectors - Peer-to-peer (P2P) finance (sometimes called crowdfunding), online staffing, P2P accommodation, car sharing and music/video streaming – are currently worth£500m a year tin the UK.
Sharing services use technology to offer consumers access to a service rather than ownership of a product… why buy DVDs and CDs when you can stream films, TV and music by subscribing to a music/video streaming site? And why own a car in central London or Paris when companies like BlaBla Car will match travellers with car owners heading for the same destination.
New analysis by PwC says these five sectors alone could deliver annual UK sales of around £9 billion by 2025.
Globally, PwC says revenues from the five sectors could hit $335 billion by 2025, up from just $15 billion today.
In just under a decade, the sharing economy has grown from occasional dealings between friends and family to a pool of global businesses increasingly valued in the billions.
Nevertheless, despite media hype around high profile sharing companies such as AirBnB, Uber and Spotify, current revenues are relatively small, but PwC economist Robert Vaughan, says potential growth is substantial:
“The sharing economy is a result of the collision of advances in technology, resource scarcity and social change.
“Over the next decade, our analysis highlights the potential for significant value to be created by five of its most prominent sectors, playing an ever more pronounced role in the commercial landscape.
“Just $15 billion of global revenues in this five sharing sectors today could rise to well over $300 billion by 2025. But achieving this potential will require important regulatory and competitive challenges to be overcome.
“The UK is positioning itself to take advantage of this growth, developing progressive policies towards the sector. For example, officials have just announced plans to remove laws controlling short-term rentals, opening up the door for short-term P2P accommodation sites to expand."
Several high profile companies have pioneered this sharing economy approach, but have disrupted some established organisations in the process; one such is Uber, which has sparked protests by black cab drivers in London.
At the same time, others have embraced the sector; with Avis buying car sharing company Zipcar and French car-sharing pioneer BlaBla Car, investing in the UK.
John Hawksworth, chief economist at PwC, says that, in some respects, the sharing economy is a throwback to the pre-industrial age when village communities had to share resources to survive, building trust through repeated interactions with people they had known all their lives.
“Modern digital communications allow sharing to happen across a global village of consumers and providers, with trust established through electronic peer reviews.
"Looking beyond the sectors where sharing is already well established, there are some very exciting growth opportunities that are yet to be fully realised.
“That means companies need to do an audit of which of their tangible and intangible assets could profitably be shared in future and we think this model could spread to other sectors such as energy, telecoms and retailing.”
Email: John Compton
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