From disruptors to established leaders: Britain’s sharing economy set for 60% upsurge in 2017
Sales generated by the UK's five biggest sharing economy sectors could grow by as much as £8bn this year, driven by an increasingly digitally literate and entrepreneurial population, according to new predictions from professional services firm PwC.
The UK’s sharing economy has been growing at the fastest rate in Europe, with transactions almost doubling year-on-year; from £3.9bn in 2014, to £7.4bn in 2015, to an estimated £13bn in 2016.
And despite broader market uncertainty caused by Brexit, the peer-to-peer (P2P) market remains on track for continued rapid growth this year, according to the PwC analysis.
“Trust will continue to be the key sharing economy issue in 2017,” said PwC economist Rob Vaughan. “To tackle this, we expect platforms to implement proactive new forms of self-regulation this year. The interaction between the sharing economy and the tax system is also set to move into the spotlight, as the implications of legal cases become clearer.
“Policymakers will need to show a bold appetite to try new policy approaches and foster a spirit of collaboration between all stakeholders to find the right balance between protection and flexibility.”
The two largest sharing economy markets – collaborative finance services such as Kickstarter and Zopa; and peer-to-peer accommodation providers like Airbnb and Onefinestay – will continue to go from strength-to-strength, PwC says. In terms of incomes, peer-to-peer transportation like Uber and Zipcar remains the UK’s biggest sharing economy sector, capturing a third of total sharing economy revenues.
But it is on-demand household services in areas such as DIY tasks, dog walking and dry cleaning that will be the fastest-growing sharing economy sector, with revenues set to expand at roughly 45% a year to 2025. There is also a sizable growth opportunity for on-demand professional services – carried out by qualified experts – which PwC forecasts to expand by 40% per year to €20bn of annual transactions in Europe by 2025.
Looking ahead, PwC claims that the ‘digital natives’, who powered the rise of the sharing economy, will begin to take a backseat to the ‘silver surfers’ – or over 50’s – who are becoming the fastest-growing user group for many peer-to-peer(P2P) platforms.
By 2025, PwC forecasts that total transactions in the UK sharing economy could reach £140bn, up from an estimate of £7bn in 2015 and a projection of £13 billion in 2016.
Industries where cost pressures are mounting, such as healthcare and retail, have the most to gain from the sharing economy, PwC says, and some new models in these sectors – such as MedZed and Heal in healthcare and Rent the Runway and Bag, Borrow or Steal in retail – could make headways this year.
“Innovation will remain crucial to success in the sharing economy,” Vaughan added. “A number of established players branched out into new service offerings in 2016 and we expect them to invest significantly in these this year. The success of these new services will be an acid test of whether sharing economy platforms can eventually become the established leaders of their markets, or will forever be known as the ‘disruptors’.”