Better to barter [News]

October 8, 2011 by Eugene Tay
Filed under News

By Grace Chua, The Straits Times, 8 Oct 2011.

INSTEAD of buying toys for her daughter, a housewife rents them. A Singaporean tutor learnt to drive in the United States by swopping his computer-repair skills for lessons.

And a young couple who traded his Hindi for her Mandarin even hit it off and tied the knot.

A new breed of consumers is renting, sharing, swopping and bartering, and a growing number of start-ups are popping up to meet their needs.

While such ‘collaborative consumption’ has been around for years, technology is playing a bigger role than before.

For example, websites such as Rent That Toy make it easy for parents to choose and order toys online, while car-pooling start-up MyRideBuddy has an iPhone application for people on the go.

Figures on how much such businesses make are hard to come by.

But the trend goes beyond straightforward consumption such as renting handbags or gowns; consumers also get to know one another and build communities while swopping skills.

Technology consultant Akshay Regulagedda, 29, met his Chinese Singaporean wife at a party nearly four years ago, but got to know her better when they decided to exchange language skills. Their language exchanges lasted several months before they started dating.

‘My Mandarin is still bad, sadly,’ the Indian national joked. ‘You do need some structured learning for grammar, vocabulary and so on, along with unstructured learning from exchange partners or wives.’

This year alone, at least seven local start-ups using the collaborative-consumption business model have launched or are about to do so.

Mr Ashoke Sengupta, founder of MyRideBuddy, said technology lowers the cost and effort of coordinating car-pools and other types of sharing.

‘Almost everybody has a smartphone,’ he added.

The public is also more cost- and environmentally-conscious.

For instance, housewife Andrea Kwan, 37, does not buy bulky, expensive toys for her toddler but rents them instead.

‘A child’s attention span is really short,’ she said. ‘Even if you buy a toy, there’s no guarantee she’ll like it. And she’ll outgrow it quite fast.’

A large play stand can cost $200 in shops, but can be rented for just $36 a month. And as her family lives in a three-room flat, space is at a premium, Ms Kwan said.

Environmental consultant Eugene Tay of Green Future Solutions said: ‘The advantages of collaborative consumption are that fewer resources would be used to make and ship products, and less waste is generated and disposed.

‘In addition, it maximises the use of space and time, and connects people of similar interests.’

But there are specific characteristics that make the model work, said marketing professor Ho Teck Hua, who is also vice-president of research strategy at the National University of Singapore.

There must be idling capacity – for example, most people drive cars for only a short time each day, but a shared car will be driven a lot, by many people.

There must be basic rules to stop people from taking unfair advantage of the system – such as by stealing a rented car – but there must also be ‘room to learn to trust and be trustworthy’.

And there must be a critical mass of people who want to use the product or service.

Social enterprise tech start-up Newton Circus found this out the hard way.

Its group-buying service, SwayTrain, started out as an alternative to group-deal sites such as Groupon. It got customers to search for what they wanted rather than ‘pushing a product on them’, said founding partner Jason Aspes, 38. But there were too few people here who wanted the same product at the same time. Now, the site just offers price comparisons and lets online shoppers donate a percentage of what they spend to selected charities.

Other potential stumbling blocks are perhaps more specific to Asia, where Prof Ho says owning a car or a grand piano is still a way to say ‘you’ve made it in life’.

And here, family responsibilities often come before individual wants or community sharing, pointed out design researcher Soh Lishan, 27.

And not everything on the spectrum of collaborative-consumption goods and services is for everyone. Miss Soh, for instance, said she would not couch-surf, which is to stay in a private home while travelling. She values her privacy.

Yet for all the obstacles to collaborative consumption here, it could deliver other, hidden benefits, said Prof Ho.

As Singapore’s population grows and its diversity increases, collaborative consumption could nudge people into trusting and sharing with each other more.

‘Singapore is where it’s less likely to happen but, in some ways, a place that needs it the most,’ Prof Ho said.

‘The US is one of the most individualistic countries, but they are able to share. Why shouldn’t we learn to do it too?’

Source: The Straits Times

Tags: Collaborative Consumption, renting, Sharing, swopping and bartering