Mastercard on the Sharing Economy

Mastercard believes the sharing economy is large. growing rapidly and here to stay. Key quote from their press release on their recently released sharing economy study:

“The sharing economy is experiencing an extraordinary level of growth, transforming the fundamental way industries operate and people experience a variety of things,” said Mark Barnett, President, Mastercard UK & Ireland.

The study chart below shows how much faster the sharing economy is projected to grow relative to traditional rental industry segments. 

Online staffing, which Mastercard is projecting to grow at 37% compound annual rate, caught our attention for two reasons.

First, we don't often see online staffing included in sharing economy analyses. 

Second, a 37% CAGR would mean this segment would double every 2 years. This would mean it would be 16 times as large in 2025 as it is today.

That's a lot of projected growth.

The Mastercard report is a little hazy about what they are including and not including in their sharing economy definition. They are also a bit unclear about what geographies they are including.

But if they are including China, the forecast is probably reasonable.

As the World Economic Forum article The numbers that make China the world’s largest sharing economy points out, China's sharing economy is large and growing rapidly. Key quote:

In 2015, the sector was reportedly worth $229 billion and is predicted to grow by 40% annually over the coming five years. China’s state information sector recently announced that by 2020, it could account for over 10% of domestic GDP, and that the ratio will continue to grow to roughly 20% by 2025.

To put this into perspective, the largest U.S. industry is healthcare. Very broadly defined, the healthcare industry is about 17% of U.S. GDP. Real estate very broadly defined is probably the 2nd largest, at about 13%.

So clearly the sharing economy, even if the forecasts are off quite a bit, is going to be very, very big in China. And if Mastercard is correct, also elsewhere in the world.

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