Power banks are now essential in an age where people are constantly glued to their smartphone screens. In China, power bank rentals have just become the latest and hottest sector for startups and investors.
One investor of shared bike startups said that it is crazy, and the pace of financing for power bank rental startups is 10 times faster than that of the bike-sharing startups.
As I listened to industry practitioners’ views on the power bank rental sector, I had this question in mind: as power banks are getting smaller and smaller, do we really need to rent one?
Where: Co-working space provider Kr Space offices in Jiuxianqiao, Beijing
When: May 3
The event was hosted by Du Muyu, a tech writer at Chinese tech blog 36 Kr. The event speakers include power bank rental startup founders and investors who have placed bets in this sector.
Tang Yongbo, founder of power bank rental startup Xiaodian, estimated that in order to provide timely services for every Beijing resident, there needs to be 1.5 million power banks available for rental, and this figure will climb to 40 million if rentals are extended to the entire country. Tang predicted that the number of power banks available for rental will be enough to meet the needs of users in a few cities either by the end of this year or early next year.
In fact, the power bank rental market could be huge. I did a little bit digging. Chinese tech blog 36Kr calculated that for power bank rentals, it can be used for 0.8 times per day, three hours each time. Different companies charge varying fees for rentals, but the average rental fee per power bank each day is about RMB 4 (USD 0.58).
In early April, Beijing-based Xiaodian raised RMB 100 million (USD 14.5 million) in Series A financing led by tech giant Tencent and Vision Capital.
Tang added that although smartphone batteries now last longer, new apps and games consume a lot of battery power. Though many people own several power banks, they will always forget to bring one when they need it.
I partially agree with what Tang said. That is the case with battery consuming apps and addictive games, and that is when we will need power banks. Personally, I never forget to bring my super handy power bank which is about the size of the smallest iPhone, but much lighter. And I only use it about once a week when I am out at an event.
Zhao Nan, a partner of Vertex Ventures, responded that this depends on the consumers when asked whether the power bank rental trend has taken off. Take bike-sharing for example, with almost everyone is riding a shared bike, we can then say that the bike-sharing trend has caught on, continued Zhao.
This makes sense. When I got my hands on shared bikes and did not have to return it to a predesignated bike parking station, it was exciting and it saved me so much time that I hoped it appeared earlier. Although some might say that power bank rentals will be next big thing like bike-sharing, I doubt it because I rarely found myself the need to rent a power bank. It is no doubt that consumers would try it if companies offer free rentals, just as how ride-hailing and bike-sharing startups are doing it now to increase their consumer bases. But if the subsidies stop, user numbers will drop significantly.
Chen Hongliang, a partner at Vplus Venture Capital, is seeing the trend changing from providing products to offering services. He stressed that power bank rentals and other sharing economy sectors are offering services to users.
“The market for product makers today will be the same market size for service providers tomorrow,” he said.
Views of Chinese consumers towards materials or products are subtly changing. The trend of having less possessions are taking on among middle to high income working professionals. They give away clothes and toys that they do not need regularly. They would rather rent than purchase something they do not use so often. Consumption, in my opinion, is shifting from buying to renting, and rental is a form of service.
Another investor added that the need to charge smartphones with power banks is already there. Compared to shared bikes placed on public streets, shared power banks are placed inside establishments like restaurants and cafes. The operation and management costs are much lower than that of shared bikes.
That’s why the idea of power bank sharing may work.
Kr Space is a co-working space provider. The event took place in Kr Space offices in northeastern Beijing’s Jiuxianqiao. Although the event notice said that there will be about 30 people, at least 50 people arrived on Wednesday. The space became congested and the air was stuffy. This event also offered online live streaming service.
Speakers included both startup founders and investors in the power bank rental business. Tang Yongbo (Xiandian founder and CEO), Liu Wenyuan (founder of Hidian), Chen Hongliang (partner at Vplus VC) were part of the lineup.
Audience interaction: ★★★★★
Speakers spoke about their insights on the power bank rental scene and the startups’ latest progress. The three-hour event also allowed the audience to raise questions for these business professionals and discuss the value of this new business model.
This event focused on one of the hottest sectors in China’s startup scene. Snacks and drinks were provided, and it is suitable for people who are interested in it and hope to get more knowledge about the future of power bank rentals. At least after this event, I know I can probably find a power bank in Beijing by the end of this year.