Collaborative consumption is to share property and techniques with other people and create new value. It is a way of consuming some products or goods without owning them. That is to say, people can consume through collaboration. For example, people can drive cars without buying a car and some people rent their vacancies for travelers.
In “TIME” magazine, collaborative consumption was selected as one way of “Ten ideas to change the world.” With the trend, various projects which spread a new sharing and integrating culture have spread into our daily lives in Korea. When speaking about collaborative consumption, the key words are share and exchange, not ownership or purchase. Contemporary people need to be wise and agonize about their consumer activities especially during this economic depression period.
Collaborative consumption started for some reasons. Lauren Anderson, an officer of Collaborative Lab, said, “Collaborative consumption will become a trend in 2012. People start paying attention to collaborative consumption which includes sharing, lending, and interchanging.” According to Lee Kyoung-won, professor of Economics in Dongguk University, there are three motives that have gotten the consumption trend started. First of all, long-term economic depression let people look back at their spending habits and think of creative methods to make and save money. Thus, collaborative consumption is a kind of breakthrough made by the economic crisis. Second, information network system plays a pivotal role in the spread of collaborative consumption. Social Network Service (SNS), Mobile, and Location-based Services belong to the information network system. A lot of people communicate about lending, sharing, and donating to each other on the Internet. Thanks to smart phones, it is possible for us to exchange anything with people in real-time. Third, there are many consumers who try not to be tricked by sellers nowadays. People tend to think of their belongings as their alter egos. Therefore, they choose collaborative consumption in order to show their true self-identities and active subjects with regard to spending, not to become passive objects in the consumer market. They form a network with people who shared identities of consumers and maintain good relationships as sensible consumers in Korea.
Do you know any examples of collaborative consumption? There are four types of collaborative consumption, such as rent, interchange, cohabitation or shared space, and secondhand deals. First, there is a very interesting rental project in Korea. It is called ‘The Open Closet Project.’ This project allow people to borrow a suit for interviews for cheap prices, from 5,000 to 20,000 won and people can also donate their suits that they do not wear anymore on the website ‘Open Closet.’ Han Man-il, the owner of the open closet said, “Our project is valuable because we make those who take the first step into society gain confidence from social seniors’ suits.” They should interview to get jobs, but they are surely strained. For them, we lend good suits for lower prices. Donators leave messages to cheer them up.” These days, renting businesses are very popular because of sky rocketing prices and economic depression. However, there are lots of renting businesses where the owners are lending suits for high prices. In particular, people should borrow the suits that cost from 50,000 to 100,000 won for a few days from other renting businesses. The people using these businesses can feel it is not renting but buying. It is an unreasonable price compared to the open closet project. Han said, “Of course, we are lending suits for low prices. However, I do not think the price of clothes is the key point of our project. The most important thing is that we cheer young job seekers through this business. In reality, some borrowers write letters and comments on our Facebook page. When we see their review, we are thankful and feel worth doing this work.”
In the United States as well as in Korea, consumption through rental has become more active. An increasing number of people rent cars at Zipcar, which is the world’s largest car sharing company rather than try to buy a new car. Particularly, Zipcar are frequently found throughout San Francisco. People who rent cars at Zipcar think that it is more reasonable to pay costs when they use cars rather than paying burdensome maintenance expenses of car. People can rent cars at low costs because Zipcar sets a price by the hour unlike other existing rental enterprises which charge rental fees by the day.
One of the ways for collaborative consumption is to exchange, that is, to barter for goods. There are some businesses that help these exchanges and communication between people who want to find partners for deals. For example, users register their unneeded items at Swap.com and find what they need among items which are registered by other users. They exchange ownership itself beyond simple rentals. The Swap.com market is available anywhere in the world. Swap anything, with anyone, anywhere ? there are no geographic restrictions. “Turn what you have into what you want” is the sentence which best describes swapping. One swap user said, “There are plenty of reasons why we are addicted to swapping - saving money, helping the environment, being resourceful, and sharing with others, just to name a few.” Another example of exchange is the thredUP site which helps people exchange kids’ clothes. Clothes do not grow but kids do fast. When thredUP users send their kids’ clothes, which are too small to wear, to the thredUP site after becoming a member, they receive the rights to exchange with other kids’ clothes. Then, they can bring palatable clothes which other users have posted free of charge using their right to exchange. The characteristic of thredUP is that there is no direct money transaction between users. Therefore, confidence about the deal between users is naturally guaranteed because people who intend to swindle or have unwholesome intention do not participate.
Next, sharing spaces or communal living also belongs to collaborative consumption. For example, KOZAZA provides a social housing service by sharing traditional Korean-style houses called “Hanok.” It enhances the social value of “Hanok” and seeks the generalization of “Hanok.” KOZAZA is similar to Airbnb, which is a trusted community marketplace for people to list, discover, and book unique accommodations around the world, so, it is called the Korean version of Airbnb. However, there is an obvious difference between them. The room KOZAZA provides is a traditional Korean house all over the country. It is attractive to foreigners who want to experience Korean traditional culture in antiques and nature-friendly houses. Also, it is useful for Korean people who are accustomed to life in apartments. Jo San-gu, who is president of KOZAZA said, “Erstwhile ‘Hanok’ was space for visiting, not lodging. However, we changed existing perception of people and made ‘Hanok’ accommodation available.” Like this, KOZAZA is practicing collaborative consumption by sharing houses.
Another way of collaborative consumption is to use second hand items. Kiple is a community which helps share kids’ clothes. Unlike thredUP, which simply exchange clothes, Kiple use concept of money when trading. If people send clothes to Kiple, Kiple saves Kiple money according to number of clothes and quality of them, and then people choose clothes they want to buy, using Kiple money.
In society, the second-hand bookstore Aladin is popular. It is meaningful because people can sell their books which they do not read or already read, as well as buy used books. A number of university students came to Aladin for selling or buying books, so they became the main agents of collaborative consumption and experienced wise economic activity. One university student who came to Aladin bookstore said, “When university tuition is so expensive, I could buy books I want to read as well as books for classes at low costs. I am pleasant to practice thrift through this second-hand bookstore.” Like this, people can easily practice collaborative consumption in real life.
In addition, there is a project in which collaborative consumption is applied. September 20th, Park Won-soon, mayor of Seoul, announced the ‘Sharing City, Seoul’ business and pushed forward a lot of sharing businesses. The business’ ultimate goal is to realize ‘collaborative consumption’ through various projects. The city will promote 20 projects first, including sharing cars, parking lots, tools, children’s clothes, and rooms, by setting up online platforms and offline facilities. Also, the sharing business is very effective because it lets ordinary people participate in this sharing infrastructure.
Here are some examples about the sharing business. First, ‘Town Workshop’ is a place where many people can lend their gadgets such as tools or a suitcase and have some household items such as umbrellas or a bicycle fixed. Second, ‘Town bookshelf’ is eagerly waiting for you. If you have books piled up in your room and you do not read these books at all, you can give them to the guard’s office of your apartment building. Also, you can borrow enjoyable books from your neighbors. Third, the ‘Home Visit System’ is similar to a home stay. The mayor got the idea from the foreign website ‘airbnb,’ where owners offer their unoccupied rooms to travelers. This system is very helpful to owners because they can make foreign friends and earn some money thanks to the exploding travelers in Korea. In addition, ‘Smart Parking Lot’ is valuable for reducing the traffic jam in big cities, such as Seoul and Busan. Residents can post when their parking lot remains empty, for instance, after they go to work and before they come back to home, and other citizens visiting the areas can park their cars there during the vacant time and pay fees later. Park said, “If five percent of such resident-only parking lots are shared with many people, it is equivalent to building new parking spaces for 1,862 cars and can save 23.3 billion won.” Seoul city is bargaining for good effects.
First, this business would bring further practical help and job creation opportunities to Seoul. The unemployment crisis has become a serious social problem, but Sharing City Seoul business can lead to major breakthrough on the social problem of chronic unemployment. Second, the business can solve urban problems, such as parking. Scarcity of parking space is another serious problem, so some unscrupulous people tend to park their cars in the handicap parking. Third, Seoul can reduce its budget by maximizing the utilization of resources. Park Won-soon, mayor of Seoul, said about Home Visit System, “Seoul is short of 15,000 rooms compared to the number of travelers. If 1,000 households participate in the home stay program, it is equivalent to establishing 20 hotels with 50 rooms each. It is also a way for retired baby boomers to earn money by making their houses available.” Four, Sharing City Seoul business can recover our community spirit and make people feel warm in our life by sharing our things with many people. “The world is paying attention to an economy based on sharing, not possession. By expanding the sharing culture which we used to have in the past, community culture can be revived. It can also help us save social expenses spent for safety and welfare. Participation by citizens and various sectors is a key to Sharing City Seoul business. I believe citizens can become delighted sharers.” Park added, “In fact, our society was a sharing culture in the past, but the culture is fading away through urbanization and industrialization. The city of Seoul is sure that the collaborative consumption and sharing economy can be an alternative for our future. I am sure that social and economical problems will also be reduced.”
Generally, we should think about the effects of collaborative consumption. Lee Kyoung-won, professor of Economics said, “Collaborative consumption is related to Sharing Economy. Concretely speaking, collaborative consumption belongs to Sharing Economy. Sharing economy means that people could borrow and lend anything. The key word is not possession but sharing.” He also said, “Collaborative consumption provides people with profits. For example, clothes and lodging industry is very good to realize collaborative consumption. More importantly, the consumption can reduce waste because it makes the production decreased compared to usual consumption.” But he also voiced his worries about collaborative consumption and the sharing economy. “Of course this consumption manner is helpful to economize and improve our environment. But, please remember. Short-term is better than long-term. If this consumption continues forever, what will happen? Have you heard about the ‘tragedy of commons’? If collaborative consumption continues, a lot of company does not want to produce because people tend to borrow and lend. Thus, resources can be depleted. If production is delayed, our economic system will do not work normally. I think this consumption should be careful when taking a long-term view, but I agree that it also could be an alternative for economic depression like we face nowadays. Of course, I would like to say this consumption has good meanings.
Nowadays, the wind of the collaborative consumption is like fresh air in this time of economic crisis. Do you remember the Anabada campaign, which encouraged actions ‘save, share, change, and reuse’ campaign - held in 1997 in order to overcome economic depression. The campaign started because people back then wanted to escape the IMF crises themselves. Collaborative consumption is also focusing on these four categories of the Anabada campaign. We can enjoy living with this wind with other people by sharing. The new paradigm of the possession has just started. Why do we not practice the collaborative consumption right now?
Sim Su-ji, Kim Kang-su firstname.lastname@example.org, email@example.com
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