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Home » News » Industry news » Umbrella-sharing startup loses all 300,000 of its umbrellas

Umbrella-sharing startup loses all 300,000 of its umbrellas

2017-07-16 21:03:26


A Chinese umbrella-sharing start-up has hit a patch of bad weather after nearly all of its 300,000 umbrellas were stolen just weeks after launch.

Sharing E Umbrella, modeled after popular bicycle-sharing platforms, launched in April with an investment of 10 million yuan ($1.9 million) and by the end of June had rolled out in 11 mainland Chinese cities including Shanghai, Nanjing, Guangzhou and Nanchang.

In theory, the app allows people to rent umbrellas — which are picked up from stands located at subways and bus stations — for a deposit of 19 yuan ($3.70) and 0.50 yuan (10c) fee for every 30 minutes.

According to a report in the South China Morning Post, citing Chinese-language news website, company founder Zhao Shuping was inspired by bike-sharing platforms and “thought that everything on the street can now be shared.”

“We were really impressed by the bike-sharing model,” Zhao said.

While sharing economy platforms have exploded in popularity across China, it hasn’t all been smooth sailing. Last month, two popular bike-sharing companies were forced to shut down after most of their bikes were stolen.

Earlier this year, photos showed hundreds of bikes dumped in huge piles on the streets in the southern city of Shenzen, prompting calls for tougher regulation. In the eastern city of Hangzhou, thousands of bicycles that had been left chained up around the city were seized by police and dumped in a field.

The issue for Sharing E Umbrella, it turned out, was getting people to return the umbrellas. “Umbrellas are different from bicycles,” he said. “Bikes can be parked anywhere, but with an umbrella you need railings or a fence to hang it on.”

More to the point, the platform doesn’t charge users an unreturned umbrella fee, meaning most people simply ended up keeping them. Zhao said taking them home was “probably best” as they would at least be “safe.”

Zhao said not only did he plan to replace the stolen umbrellas, which cost 60 yuan ($11.60) each, he planned to make 30 million of them available across the country by the end of the year.

Despite the questionable business model — which may struggle to bring in revenueoutside of the rainy season, as news website Shanghaiist pointed out — Sharing E Umbrella has no fewer than 14 competitors.

Brellabox, a similar concept floated on the US version of Shark Tank last year, was described by businessman Kevin O’Leary as “maybe the worst idea I’ve ever heard.”