For Businesses: Reactions by incumbents, Regulatory capture
For Users: Data management, Privacy
For both: Transparency, Pricing
In order to succeed, ventures need to attain the indirect network effect so that their platforms has enough members for it to attain economies of scale and keep the cycle of sharing going. Platforms also need to respect consumer concerns about spam. Consumers are receptive to only those things they are familiar to. Hence, changing consumer habits would be an uphill task. Marketers must also remember that digital ads only relevant to specific target group would work. This is effective when the ad is camouflaged as an entertainment or news content. Trust is hailed as a cornerstone of transactions, technology being the other. But as a platform becomes more democratic – vesting many powers to consumers, it is susceptible to abuse. Negative reviews are exaggerated and there is always scope for exploiting loopholes in the system. Hence, it is important to tread carefully. Nonetheless, it is evident that sharing economy has a lot of potential and opens a huge door for innovation.
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About the Author:
Niteen Bali is a second year student at IIM Calcutta and is part of InsideIIM's student team. He loves to travel and immerse in deep conversations. A shore waiting for the tide, currently reading 'The Little Prince'. Chandler Bing is his idol.
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