Shared power bank business makes a slit at Hong Kong
Shared power bank business is expanding in Hong Kong with the mobile phone becoming an indispensable part of our life, however, some service providers are still facing difficulties and a few even have suspended their services under safety and other business concerns.
Locate a shared power bank though a mobile application
Shared power banks provided by ChargeSpot are rented to customers in charging station located in 18 districts. By using mobile apps, users can find a nearby charging station. The number of available bank chargers is also shown in the apps. Borrowers can take and return the power banks in a nearby charging station.
ChargeSpot, a shared power bank services provider, constructed an automated GPS based system which allows customers to check the availability of power banks when they want to rent one through the apps.
“Customers can rent and return power banks at any charging station across 18 districts,” said Jess Cheng, chief marketing officer of ChargeSpot. About HK$5 rental fee will be charged for the first hour. Renters need to pay HK$10 in total for the usage of 48 hours together with a deposit of HK$100. The deposit will be refunded after the completion of the transaction.
ChargeSpot conducted a research and the results showed over 70 to 80 percent of people owned at least one power bank. However, less than 40 percent of people had the habit of charging their power banks or bringing their power banks with them every day. Therefore, there is market potential for such services which offer convenience to the public. Using “Hong Kong as a base, we have expanded the business overseas, including the East Asia region and Japan,",Chan added.
Demand rising but risks exist
With the increasing usage of mobile apps, people require sufficient smartphone batteries for their daily routine. The development of electric payments, like Alipay, WeChat Pay and Apple Pay, also boosts their sales in Hong Kong.
“Smartphones are of utmost importance nowadays and it is (a) prevailing trend which makes our business prosperous. It is believed that the business can be expanded to fulfil the enlarged demand,” Jess explained.
“We aim to expand the stations up to 5000 in 2018,” Jess revealed. Cooperating with diverse stores and shopping malls, ChargeSpot provides more than a thousand stations, including in all The Link’s shopping malls and Sogo department stores. Pedestrian flow is the main determinant of installing charging stations. Taking Tsim Sha Tsui as an example, there are more than a hundred charging stations provided.
However, major mobile service providers, like Smartone, CSL and CMHK provide power bank rental services and some market competitors also provide similar rental services with similar charges or even for free.
The company needs to buy the third party risks insurance and also pass a test conducted by the Electrical and Mechanical Services Department.
Special business model overcomes the hurdles
Their charging stations provide LED screen for advertisements of different stores. Those advertisement users can get a discount if they promote the bank charge services at the same time. It is a mutual-benefit relationship.
To deal with the keen market competitions, ChargeSpot enhance the collaboration with stores by providing advertisements for them on the power bank stations’ screens and customize the charging stations’ theme specifically. “It can further expand our network by providing incentive and be more competitive.” said Cheng.
Jess also mentioned that introducing this new renting habit in Hong Kong is difficult. “Changing people’s behavior and habit takes time. But, we still consider that increasing service convenience can change this situation.” Cheng added.
The business model works but a company suspended the business
Apart from renting power banks from different stations, Ecrent, an online rental platform, launched the shared power bank service from 2016 to 2018 and suspended the services recently. They cooperate with 7-Eleven, chain convenience store group, to offer the service.
The company recorded over a thousand daily rental at average, it's especially high in central business districts. “This is a 24-hour business and the demand are much higher than the supply.” said Chan, a spokesman for Ecrent. The cost of a power bank is only HK$40 to HK$50 and the rent fee is HK$10 for 3 days.
However, they decide to suspend the rental business starting from 2018. “Safety issue is an uncontrollable risk in this business and it even cannot be completely covered by insurance or prevented by quality control and safety tests. Also, more cost expense is required to face the market competition. We have diverse business on the online platform and have to maintain the stability of the core business,” Chan explained.
“This sharing business can benefit many stakeholders,” Simon Lee said, the convener of Sharing Economy Alliance in Hong Kong. Simon considered that it can provide marketing opportunities for the stores and the add-value services for the malls. “It does not take any public place and therefore a social acceptance level is ensured,” said Lee.
Unlike shared-bicycle, Simon revealed that the cost of power bank shared service is smaller and at a reasonable level. “It does not waste any resource and clearly send a message to the public: Don't waste anything. And, that is fulfilling the principle of sharing economy.” Lee explained. For the prospect of this sharing business, Lee mentioned that expanding the coverage can stimulate the underlying market.” Lee added.
Reporting by Felix Tam. Editing by Winnie Lee.
《The Young Financial Post 新報人財經》