The sharing economy is rebounding slowly in China—a sign that the industry could suffer permanent damage on a global scale.

WHAT HAPPENED: China’s sharing economy was valued at over $470 billion (3.2 trillion yuan) in 2019, with an 11% growth year-over-year. In contrast to the U.S., the Chinese government has heavily invested in the sector, which even extends to products like umbrellas and portable phone chargers.

WHY IT MATTERS

More so than other businesses dependent on brick-and-mortar sales, companies in the sharing economy will need to regain consumer confidence in order to bounce back from the pandemic. While the Chinese economy shows signs of recovery after reopening three months ago, the sharing economy is improving at a slower rate than other industries. Considering that Chinese consumers are more open to renting resources and sharing spaces with strangers—94% of Chinese consumers buy into the sharing economy versus 43% of Americans—U.S. businesses should learn from developments in China. Among other adjustments for the post-COVID economy, new sanitation processes will be more expensive and difficult to monitor for U.S. multinationals like Airbnb and Uber. But sharing economy brands have no choice but to invest in scalable sanitation solutions that will help win back consumer’s trust.