March 28, 2013 08:32
Han Man-il, a former office worker, teamed up with friends last year and opened a website that loans formal suits to jobseekers. "We thought it might be a good idea to let jobseekers share formal suits they don't have much chance of wearing later if they buy one just for their job interview," he said.
Han (32) and his friends did not even buy the clothes but got them from donors. All they spent money on was clothes hangers, an iron and W60,000 (US$1=W1,115) to set up their own website. Now around 10 people use the website every day, generating between W3 million to W5 million in revenues a month.
Cho Min-sung (47), head of BnBHero, rents out empty rooms to people visiting Seoul. But he did not buy scores of apartments or houses. He simply convinces home owners to let their spare rooms and arranges them for potential out-of-town guests through the Internet.
Cho's website opened in August last year and since then around 5,000 visitors from Hong Kong, Singapore and Taiwan have rented rooms through the website, translating into W500 million in revenues.
Cho, a former executive with multinationals including Microsoft and Sony, found out about the most successful global short-term rental website called Airbnb when he visited New York on a business trip in 2001 because he felt hotels were too expensive. Once he discovered that there was a lucrative business model in it, he quit his job.
Businesses based on the new austerity which involve renting or sharing are gaining a lot of attention. Straitened economic times are persuading more Koreans that it is a good idea not to buy everything brand-new.
Businesses based on sharing are not solely profit-driven but spread an ethic of "collaborative consumption," where people opt to share space or products that they do not need all the time.
The concept of the "sharing economy" was coined by Harvard Professor Lawrence Lessig in 2008, and in 2011 Time magazine chose the concept as one of its "top 10 ideas changing the world."
The range of products or services continues to grow. Recently, they have expanded to cars, luxury handbags and other high-priced items.
The Seoul Metropolitan Government started a car sharing service on the Internet last month. Users can rent and return cars at around 50 designated spots in the capital. People can rent cars for one to two hours as well, whereas conventional car rental firms only lend them by the day.
One website lets people share handbags from Gucci, Louis Vuitton, Chanel and other luxury labels for just W20,000 to W30,000.
A key aspect of a sharing economy is how careful people are willing to be when they use borrowed products. If customers do a lot of damage, the costs end up getting too high.
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