Collaborative consumption encompasses the sharing economy.
Contents
Definition
Collaborative consumption (CC) can be defined as the set of resource circulation systems, which enable consumers to both "obtain" and "provide", temporarily or permanently, valuable resources or services through direct interaction with other consumers or through a mediator. Collaborative consumption is not new; it has always existed (e.g. in the form of flea markets, swap meets, garage sales, car boot sales, and second-hand shops), but it has regained a new impetus through information technology, especially Web 2.0, mobile technology and social media. Collaborative consumption stands in sharp contrast with the notion of conventional consumption. Conventional consumption involves passive consumers who cannot or are not given the capacity to provide any resource or service. In contrast, collaborative consumption involves not mere "consumers" but "obtainers", who do not only "obtain" but also "provide" resources to others (e.g. consumers, organizations, governments). Overall, consumers' capacity to switch roles from "provider" to "obtainer" and from "obtainer" to "provider", in a given resource distribution system, constitutes the key distinguishing criteria between conventional consumption and collaborative consumption.
Importance
There are broadly two forms of collaborative consumption: (1) Mutualization or access systems: resource distribution systems in which individuals may provide and obtain temporary access to resources, either for free or for a fee. Marketer-managed access schemes (e.g. Car2Go, Zipcar, Bixi) do not allow individuals to source resources, and are therefore not mutulization systems, whereas peer-to-peer renting sites or even toy-lending libraries, which allow consumers to provide resources, are. (2) Redistribution systems: resource distribution systems in which individuals may provide and obtain resources permanently, either for free or for a fee. Focusing on redistribution systems only, the Canadian-based Kijiji Secondhand Economy Index of 2016, estimated that about 85% of consumers acquired or disposed of pre-owned goods through second-hand marketplaces (secondhand purchase and resale), donation, or barter, through either online or offline exchange channels. According to the Kijiji Secondhand Economy Index of 2015, the Canadian second-hand market, alone, was estimated at 230 billion dollars. Besides, for-profit mutualization platforms, commonly referred to as "Commercial Peer-to-peer Mutualization Systems" (CPMS) or, more colloquially, the sharing economy, represented a global market worth 15 billion dollars, in 2014; 29 billion dollars, in 2015; and are expected to reach 335 billion dollars by 2025.
Consumer two-sided role
Collaborative consumption is challenging to business scholars and practitioners alike because, as a concept, it induces a two-sided consumer role which goes beyond the classic notion of a buyer/consumer, who typically has no input in the production or distribution process. Companies have traditionally sold products and services to consumers, they now start pulling on their resources too through co-creation or prosumption. According to Scaraboto, this means that individuals are able to "switch roles, engage in embedded entrepreneurship and collaborate to produce and access resources". Collaborative consumption is characterized by consumers' capacity of being both "providers" and "obtainers" of resources, in a given "resource circulation system". A collaborative consumption systems means therefore a resource circulation systemin which the individual is not only a mere "consumer" but also an obtainer who has the opportunity to endorse, if wanted or needed, a "provider" role (e.g. Kijiji, Craigslist, eBay), as follows:
Through CC, consumers invite themselves in the value creation process, not as formal workers, employees or suppliers, but as informal suppliers (i.e. providers), in order to successfully reconcile their personal interests. In the meantime, organizations tap into the sphere of private assets and skills, as formal organizations and not as family, friends, or acquaintances, to make profits or reach other objectives. The practices in which obtainers and providers may engage are therefore classified into:
Other actors
Consumers may exchange resources and services directly with or without the support of an "intermediary", which is an entity that facilitates the exchange between obtainer and provider (e.g. Kijiji, Freecycle, Yerdle). Consumers set the terms and conditions of the exchange, and this refers to pure collaboration. There are also other types of third-parties which are more heavily involved in the consumer-to-consumer relationship. These are called "mediators". They determine the terms and conditions of the exchange between consumers and may typically take a predetermined proportion of the amount of value being exchanged. Examples include second-hand stores to which consumers may donate or resell goods that are then subsequently resold to other consumers. Some platforms such as Uber, Airbnb, TaskRabbit or Lending Club are also included. The intervention of mediators in a peer-to-peer relationship signals sourcing collaboration and its corollary trading collaboration.
Collaborative intensity
Collaborative consumption can be best conceived in a perspective of "resource circulation system" incurring different levels of collaborative intensity, namely: (1) pure collaboration (C2C, or Consumer-to-Consumer); (2) sourcing collaboration (C2O, or Consumer-to-Organization); and (3) trading collaboration (O2C, or Organization-to-Consumer). The organization may be a for-profit or a not-for-profit: