Sharing Economy and Cupcakes

I’m on board of Boeing 777, sitting in my not so comfortable economy seat and enjoying the last moments of a ‘Friends’ episode. I know that very soon all displays will stop broadcasting our favourite movies and TV shows, and there will only be flight information left on the screen. Oh well, I might as well sit back and relax for a minute, before having to get up and return to the real world again, stuck in my jet-legged body.

We’ve got 10 minutes before touching down at Melbourne International Airport.

I’ve never been to Melbourne before and I’m quite excited about visiting this booming shopping & cultural centre of the Western Australia. Mind you, it’s my very first time in Australia as well, so I’m quite terrified about all the snakes and spiders and sharks. Oh well, adrenalin always makes things more interesting, doesn’t it?

We land 10 minutes earlier than the planned schedule and I get up immediately after the seatbelt sign is off, proceeding to the gate in a slow manner. I wish all flight attendants well and leave the aircraft in high spirits. Yusss! New continent, new country, new experience. Australia, here I go!

I check the weather on my phone, pleased to see that +30 and sunny is still valid, and proceed to the exit sign. I’m travelling light this time, so no need to queue for the baggage – thank God! I stop for a minute at the Duty Free section, checking out some Aussie wines & spirits. A bottle of Baileys & Shiraz in each hand accompany me to the checkout – I PayWave my Visa and smile to the shop assistant, who hands me over my goodies in a matter of seconds. She says, ‘Enjoy, Miss!’ and I think, I will. It’s 10 o’clock in the morning local time and so far it has been a great day.

After spending some time queueing for the Customs, I breathe in the Australian air for the first time. Oh God, it’s hot. Right, where is my Uber? I see a car approaching from the right and the driver is waving at me like I’m his old friend. Oh well, I might as well be, – in the era in which we are all connected through our mobile devices, it’s never been easier to make friends on the go, especially in a foreign country.

I look at my phone, tracking my Uber movement in real time – the app says we should reach the destination in 14 minutes. I ask my driver for sightseeing recommendations and we chat a bit about our backgrounds – he is originally from India, has been based in Australia for 11 years now, I’m a New Zealand based Russian, travelling around the world.

14 minutes later – the app didn’t lie! – we approach the destination. I say goodbye to my new friend and give him a 5-star review while he is unloading my heavy suitcases from the boot. The trip is paid for automatically via the app, so I don’t need to worry about a thing. My host is waiting for me outside, waving at me (again!) like I’m her old friend. Oh well, I might as well be…

I arranged my accommodation through AirBnb a couple of weeks ago – simple process to follow if you are willing to stay in a nice place and not pay through the roof for it. The room seems to be really clean & tidy, my host is incredibly friendly and helpful – she gives me her spare bus card and an advice on where locals go for food & entertainment. International travel has never been easier, has it?

My project paper at Uni was on global economy. Global economy and its effects on society, to be precise. I still remember the definition from the paper: ‘global economy is the system of industry and trade around the world that has developed as the result of globalization’.  OK, and what is globalization, in this case? Let me dig it up for you. ‘Globalization is the process by which businesses or other organizations develop international influence or start operating on an international scale’. It didn’t make much sence to me at the time, but it does now. Not the definition, but the global economy itself.

When we talk ‘global’, we talk international. Examples of international economy may include cases like companies expanding their businesses to other countries, movement of goods and services from one country to another, new ideas and concepts shared and sold internationally. These days, however, it also includes people around the world and services they offer. The other ‘nouveauté’ would be small businesses which became quite influential on the international arena due to their large online presence. Global economy has become more about people and communities, rather than large organizations and conglomerates.

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Let’s imagine for a second that you’re a huge cupcake fan. You spend all your spare time making cupcakes for your family, friends and their families. On the weekends, you go to markets and sell your cupcakes there. At some point, your cupcakes become so popular you make a decision to open a cupcake shop. Locals are happy; your shop immediately becomes a go-to place for anyone looking for delicious cupcakes. Business is going really well and you start thinking about expansion. You open a couple more cupcake shops in different cities and they prove to be successful as well. One day you receive a call from a business owner interested in buying a franchise of your business and opening a cupcake shop in his country. After a careful revision of the offer, you agree to sell your first franchise. Boom, here you go – international expansion in full action! Next step is to hire professionals who’ll help you with set-up and legal side of your new international business – lawyers, accountants, business consultants etc. If the first franchise proves to be successful, you can consider selling more of them to a few different countries, with your business becoming a real international conglomerate.

Now let’s imagine scenario number two. Instead of opening that very first shop, you decide that you can organise and run online cupcake business, offering fast nationwide delivery. Because nobody knows about your superb cupcake skills outside your town, you make a decision to grow your online presence via various social media channels – Facebook, Twitter, Instagram etc. You get your friends and relatives to spread a word to their friends and families. You start your own YouTube channel, full of cupcake recipes and fun stories about cooking. Business is going well, your audience is growing, your sales are going through the roof, everyone is happy. You hire a few more people to help with accounting, shipping and digital marketing campaigns. Success! Your ecommerce business is up and running.

But what if you don’t have enough money to open a cupcake shop or spend money on heavy online advertising? And what if somebody approaches you one day and tells you that you can make and sell your cupcakes to people they are going to refer to you, for a small fee of $0.50 off every cupcake you sell? You can do it everyday, any day – whenever you receive a new request for your famous cupcakes, you just either accept it or reject it – depending on your availability; and then, once the cupcakes are sold, you get paid automatically via an online system. Moreover, your customers are able to leave reviews for your cupcakes so that you can grow your audience without spending a penny on advertising! How great does this sound?

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Although this is not a perfect example of sharing economy, it still gives us a bit of an overview of what the concept is.

This is the definition from Investopedia:

A sharing economy is an economic model in which individuals are able to borrow or rent assets owned by someone else. The sharing economy model is most likely to be used when the price of a particular asset is high and the asset is not fully utilized all the time.

Of course we know that we can’t rent or borrow cupcakes. In this case, we are renting somebody’s time and skills, so that they can share some delicious results with us. We are using a third party who is responsible for all our digital marketing and logistics, so that we don’t have to deal with organisational side of things. We pay them comission for their services and everyone is happy.

Sharing economy has become very popular in the last few years. The examples of successful ‘shareconomy’ companies include Uber, AirBnB, DogVacay, RelayRides, TaskRabbit and many more. The concept is very simple and straightforward: people share their assets or services with other people for a fee, usually through an online platform which plays a role of a third party, which organises all aspects of the deal and charges you a small commission for that.

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The sharing economy is an excellent guide for what the future will hold, especially regarding employment. It was worth about $15 billion in 2014 and is projected to reach $335 billion by 2025.

It is a smart concept that lets people all around the world make some extra money while providing affordable services to those who are interested. I’m positive that sharing economy will grow and introduce new concepts in the future.

…I’m in my comfy AirBnb room. I’ve got a TV, Wi-Fi, separate bathroom and a cute small balcony. We shared some wine with my host before, and I got to hear a couple of fun stories about her life in Melbourne. Tomorrow is a big day, more places to explore, more planes to fly.

I’m quite confident that (almost) anywhere I go in the world these days, there will always be a room that will feel like home and a chatty driver who can take me from point A to point B and become my friend on the way. Thank you globalization for making all this possible:-)

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© Alisha Menshchikova, 2017. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Alisha Menshchikova with appropriate and specific direction to the original content.

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