France, a true stakeholder in the sharing economy
Since the creation of Ebay, the first peer-to-peer platform in 1995, France has managed to adapt to those changing circumstances by developing a genuine ecosystem in the sharing economy business, with its very own champions…
The reasons for the success of the sharing economy in France
The sharing economy, a new trendy two-words concept that you can read in every economic review, on TV and on air, is often associated with Uber or Airbnb, to name but a few. This concept describes a new phenomenon where private individuals buy services or goods from one another and not to a company. Peer-to-peer (P2P) apps, as we call Uber, Deliveroo and all the others, make the needs and the offer of private individuals match as they get in touch by using the apps. Those P2P apps concern taxi journey, food delivery, carpooling, apartment and house, car, parking space or DIY equipment renting, crowdfunding and they are very popular in France.
According to the Timbro Sharing Economy Index, a global indicator that measures how the sharing economy is developed in a country, France is ranked 19th behind the United States, which is ranked 11th and Iceland which is the 1stcountry of the ranking. Compared to the other European countries, France takes pole position as 50% of the French use peer-to-peer apps and websites, against 20% of the Germans, 19% of the Spaniards or 8% of the British according to a survey of the European Parliament. Those apps are thriving in France like nowhere else and for good reasons.
With the economic crisis of 2008, the French households have been facing a decrease of their purchase power making them watch carefully their expenses. The French culture is really about saving and earning a little more money daily, as the French saying goes “There are no small savings”. In France, the secondhand market is cultural. French people love doing a good bargain that is why Ebay or Le Bon Coin are so successful in France. More generally, the renting apps are very popular in France. Working as an entrepreneur on those apps is a way for many households to make ends meet. Renting their beach house or mountain cottage on Airbnb is common for the French. Doing food delivery or taxi journey on P2P apps as a part-time job combined, or not, with a regular job is what we call the gig economy or the jobbing. Thus, individuals are getting paid for a task, delivering food for instance.
The French champions of sharing economy
Uber, Airbnb, Ebay are the titans of the sharing economy as they are global apps with hundreds of millions of users. Yet, France has nothing to be ashamed of as it has some leading P2P apps on the European market : Bla bla car, Kisskissbankbank, Frichti, Le Bon Coin, Rakuten (previously known as Price Minister) … Let’s quickly introduce those Made in France success stories.
Bla bla car is a carpool website and an app. Back at the time of its creation in 2004 it was quite innovative on the French market, as it was one of the first P2P app in France. With 70 millions of users, 22 countries and a turnover of about 90 millions in 2015 (last figures) Bla Bla Car is the worldwide leader of carpool apps.
Kisskissbankbank is a crowdfunding website and an app, that helps people finding founds for their projects. The internet users can donate for the projects they prefer. Created in 2010 and with a community of 1 636 225 users and 141 750 projects realized this app is known to have helped artists to launch their projects, like albums for singers.
Created in 2006, Le Bon Coin is the French equivalent to Ebay. Basically, everything can be sold or rent on Le Bon Coin. Classified advertisements go from secondhand objects like cars or furniture, apartments and houses to pets and ads of job seekers. With 98 millions of transactions generated in 2016 or 1% in terms of GDP, Le Bon coin is inevitable, 37% of the French population is using it. It is stunning to see that Le Bon Coin is the first real estate website in France and also the first automobile one and the first one in terms of number of job applications.
In 2000, Price Minister was founded as a classified advertisements website, like Le Bon Coin. In 2018, the company was bought by Rakuten, the leader of e-commerce in Japan and took the name of the Japanese company meanwhile.
Frichti is the new born in the food delivery apps. Created in 2015 by a French couple it is different from Uber and Deliveroo as it is not just an app that orders and delivers food from restaurants. Indeed, Frichti has its own kitchens and its own employees to cook and deliver the food. Recently, they received 30 millions euros of found raising, this shows the trust that business angels have in their project.
The fact that France is witnessing so many big successes in the P2P apps and websites is partly due to the enthusiasm of the French government for the sharing economy. This later encourages the fundraising and crowdfunding system for those apps. The Observatory of uberisation is a new institution that has been created with the approval of the French government by well-known French entrepreneurs (the creator of Kisskissbankbank), economists and philosophers to gather key performance indicators and produce surveys about the sharing economy ecosystem. The government tries its best to create a legal framework for the employees of those apps without stifling this new sources of wealth that increase the French GDP. The government tries to regulate the situation of the employees of the sharing economy in order to have their employment conditions matching with the law and avoid them to be exploited but without setting up too constraining rules for the companies. Quite a deal.
Companies and entrepreneurs, how to copy the start up business model of the sharing economy
Not paying attention to the changes of our economy and the new business models that are emerging among the startup ecosystem is a mistake and, in the worst case, can be the direct path to the bankruptcy of the company. Companies and entrepreneurs have a lot to learn from the business model of Airbnb, Bla bla car and all the others successful enterprises of the sharing economy.
The first advice is to take the young generation and their tight budget into account. They are looking for a service at the right price, and on this issue, the P2P apps and websites are unbeatable. Plus, those customers can be very useful for the companies when they do crowdfunding as the users of those apps like Kisskissbankbank are 16 to 35 years old. Those customers should not be overlooked by companies.
Second advice, more and more people prefer the use of an object over its possession. Indeed, 52% of the people believe that they own too much things and that they can share or donate a part of it. 68% of the French prefer sharing than owning, for a simple reason. It takes less effort to rent an object than to maintain it. For instance, when you own a car, you have to take it to the garage, do the refill and many other tasks that require time and money while this is not the case if you rent the car. Many people, do not want to bother with those issues especially for the objects they do not use frequently. The enterprises should have this in mind and try to offer their goods or services for rent.
Third advice, many people buy products and sell them after when they do not match their needs anymore. Thus, a product has several cycles of life, the first one with the first owner, the second one with the second owner and so on. The enterprise do not sell a product anymore but a cycle of life. It would be interesting for companies to extent their guaranty periods so that not only the first buyer can benefit from it.
Fourth advice, bet on the social bond. Many people agree that they like secondhand or carpool platforms because they can meet new people and even make new friends. Besides, many people trust more the other individuals to do business than companies. The enterprises should work on their sympathic image to be seen as a convivial company, like Michel et Augustin, the French biscuits brand. Bla bla car did it as well by changing its name from Covoiturage.fr, meaning carpool.com to their actual name meaning “Chatcarpool.com”, underlining the friendly aspect of carpool.
Last advice, help people feeling that they are better persons. Apps for DIY equipment renting make people feel useful as they feel they are helping the others and that they are doing something good for the environment in the case of carpool.
Thus, the sharing economy has successfully merged in the French society, answering to new needs like renting over owning objects and creating more social bond. People really appreciated the P2P apps and websites, so entrepreneurs and companies should follow their path and try to adapt to those new ways of consuming. The French market is the good place for an entrepreneur to set up his business in the sharing economy.