1.

(a)
Sharing economy can be known as a relatively new business model, which is different
from the tradition one of companies hiring employees for producing products and
offering services. Instead, the sharing economy focuses on sharing of resources and
goods by individuals and groups. According to Mi and Coffman (2019), sharing
economy can be defined as an “emerging economic model usually defined as a peer-
to-peer based sharing of access to goods and services, which are facilitated by a
community-based online platform”.

However, the term “sharing economy” has been frequently criticized as being vague
and blurry. People criticize sharing economy model of involving zero sharing but
using the name to make the name of the business more attractive.

(b)
There are a few elements and conditions that can make sharing economy develop
sustainably. According to Rinne (2019), the first element and condition that can make
sharing economy develop sustainably is the rise of the middle class. Sharing economy
is driven and supported by the middle class, women especially working ones and the
elderly. The middle class would dominate and represent the majority in 2019.
Meanwhile, middle class, women and the elderly can facilitate the development of
sharing economy because the concept itself is to allow these consumers to afford and
access services or products that they could not. The increasing amount of middle
class, increasing income of working women, and rising population of the elderly all
boost the sustainable development of sharing economy.

According to Rinne (2019), the second condition that can make sharing economy
develop sustainably is the involvement of regulators (i.e., local government).
Currently, local governments are proactive in managing sharing economy. However,
active involvement and well-developed public policy can help sharing economy grow
and thrive under a desirable business environment.

Thirdly, Rinne (2019) also pointed out that elements like mindset shifts and trust can
make sharing economy develop sustainably. The establishment of sharing economy
platforms require customers to have trust in them so as to choose them rather than
traditional business. Time is also needed for customers to change their mindsets.
Companies that provide low level of trust for customers also have negative
contribution to the sustainable development of sharing economy platforms.
In addition, Mi and Coffman (2019) also pointed out elements and conditions that can
make sharing economy develop sustainably. Similar to Rinne (2019), they believed in
the importance of governance models for sustainable growth of sharing economy.
Government needs to ensure economic and noneconomic incentives are offered to the
enterprise, so as to assist it to provide sustainable options to both user and owners
simultaneously.

2. (a)
There are a few business problems. First of all, the relatively slow progress in
digitalization made Hong Kong left behind. Although some companies try to adopt
the concept of working from home, some employers still disagree with the policy as
they believe in importance of going to work punctually. Also, the mindset of Hong
Kong people is not fully ready for using artificial intelligence (AI) and machine
learning to improve operations. Meanwhile, in other Asian countries like Japan, a
fully-automated convenience store can already been seen. Thus, Hong Kong,
especially the government, needs to invest more in educating the public and boosting
local companies in digitalization of operation.

The second business problem is the lack of confidence of foreign investments into the
city. The 2019 Anti-Extradition Bill Movement created a series of social movement
which made the business environment unstable. Meanwhile, the recently imposed
National Law would be intimidating to foreign investments because of the blurry and
vague line of being charged. Therefore, because of political instability, foreigners and
investors would be less willing to work or invest in business in Hong Kong.

The third business problem is market saturation in Hong Kong. As one of the most
important business hub in the world, there have been a lot of entrepreneurs deciding
to select Hong Kong as a place of doing business. Therefore, the market of Hong
Kong would be comparatively more saturated because of the current high number of
products as well as services in the local market. Therefore, it is challenging for
entrepreneurs to start or expand their business in Hong Kong because they have to
offer new products as well as services. If the nature of the products as well as services
is similar, it would be difficult for providing the same products or services to compete
with the existing companies in Hong Kong.
(b)
It is believed that Hong Kong giving up the restrictions on hotel quarantine can have a
lot of business opportunities. The first one is tourism industry. The tourism industry
has been robust in Hong Kong with over 65,147,555 visitors in 2018 (Tourism
Commission, 2018). Such large number of tourists can support the growth of the
tourism and hotel sectors once the borders are reopened for tourists worldwide. Also,
sectors like restaurant & beverage can be benefited after there are large number of
visitors.

The second business opportunity is the needs of health-care products and services.
The elderly population of Hong Kong is relatively high while the city is named as an
aged city. Meanwhile, the local healthcare service (i.e., Hospital Authority) has been
frequently criticized of having too little resources and not responding quick enough to
needs of patients. Therefore, there is an opportunity of running health-related services
and providing personalized healthcare products to this group of aged population.

The third opportunity is the way paving for digitalization in Hong Kong. Despite the
unprepared mindset of general people in Hong Kong as mentioned before, Hong
Kong has a lot of human resources that have adequate knowledge in science and
technology. Also, the establishment of Science Park and government support on
technological development allows small-scale to middle-scale start-up business grow
and thrive.

3. (a)
According to Sneader and Singhal (2021), a new normal has arrived due to Covid-
19’s lingering effects to various markets and individuals by creating a entirely
different pre-covid era and post-covid era. The authors (2021) argued that Covid-19
has brought a lot of changes to the labor market and business environment, such as
boosting the transition to working from home, prevalence of online shopping (i.e., e-
commerce), halting business travels, digitization of business processes including
“everything from online customer service to remote working to supply-chain
reinvention to the use of artificial intelligence (AI) and machine learning”.

In view of this, a new sharing economy service in Hong Kong is proposed as follows.
It is believed that increasing health awareness, rising trends of athleisure, popularity
of e-commerce and sustainability are major trends in the post-covid era. Meanwhile,
the proposed sharing economy service would be a local jewelry rental business in the
form of mobile phone application. The platform allows user to post their jewelry for
rental while individuals can make a deal with them and proceed to rental process.
Specified delivery service would be provided by the platform to ensure the jewelries
are safe in the transportation procedure. The platform would be profited by the service
fee earned.

The mission statement of the proposed sharing economy platform would be “to
promote beauty and allow individuals afford jewelry for different occasions”. The
target audience would be individuals especially women above 18. The target audience
is also believed to have a variety of lifestyle and need jewelries for different purposes
like wedding, going to a business meeting, and travelling. However, the prices of
jewelries especially high-end or brand ones could be expensive for normal working
class. It would also be unaffordable for women to switch jewelries for clothes
matching. Therefore, the idea of such sharing economy platform provides a chance for
users to rent jewelries for different purposes.

Also, a SWOT analysis can be done to assess this business idea. For strength, this new
idea meets the needs of locals. Take wedding as an example. Many couples would like
to save more money by reducing the cost of buying gold jewelries as they might not
use them again. Therefore, the jewelries sharing platform can help them to save more
costs and still arrange a decent or proper wedding. Apart from this, individuals might
need jewelries for different occasions.

For weakness, the issue of trust enhances the difficulty for the development of such
sharing economy platform. Renting own’s jewelries to others can be risky due to the
possibility of damages, fraud, and lost. Therefore, a professional team should be hired
to validate the authenticity and condition of the jewelries before and after renting.

For opportunities, the rising number of the middle class and increasing income of
women facilitate the development of such sharing economy sharing. This group of
people would be attracted because they have a higher buying power and willingness
to rent jewelries for different purposes.

For threats, there are substitutes of cheaper jewelries that can offer similar function
for the consumers. For example, brands like Pandora, APM Monaco, and Monica
Vinader are affordable for the target group (i.e., working women).

For the milestones, it is visioned that the target of the first one year of running the
platform would accumulate over 100 sellers and 500 buyers to register on this
platform. The milestone set in the first five years of running the platform would be
accumulating 1000 sellers and 5000 buyers with 200k profits earned.

Last but not least, the cost of operations of this business idea is believed to be small.
Apart from being a shared economy platform, the use of technology has reduced the
cost of system development largely. However, a huge cost is needed in marketing and
promoting the idea. Also, a large amount of money needs to be invested to secure the
transaction process and protect both the sellers as well as buyers.

(b)
When it comes to the value proposition of the proposed business ideas, there are a few
ideas. It is believed that the company’s service fulfills the needs of customers in a few
ways. The design of the company’s service website includes categories of different
types of jewelries, their brands, color, and suggested occasion. Therefore, users can
select the items they like or want easier. Also, the platform should cooperate with
delivery service in large quantities to lower the annual cost of delivering products.

There are a few strategies that can be adopted by the company. Currently, there are
scarce direct competitors, such as Lane’s Bridal that provides rental service for bridal
accessories. Meanwhile, the other competitors would be Carousell, which allows
sellers to sell jewelries there and official stores like Chow Tai Fook and Chow San
San. The first one is cost competition. It is important for the platform to provide
cheaper rental service when compared to competitors. For example, the company has
to make agreements with buyers on the price of rental fee so as to make it lower than
usual price in market. Also, differentiation strategy can also be used as there has been
no large-scale jewelries rental platforms that includes all brands and all kinds of
jewelries. The jewelries provided should allow users to rent for different purposes,
such as wedding, going to a formal dinner, and matching different types of clothes.
The inclusion of a professional validation team also distinguish the platform from
competitors in the protection of both the rights of users and sellers. Last but not least,
the strategy of customer intimacy can be used. The platform can provide discounts
(e.g. 5% off) for users who post reviews or photos of them wearing the jewelries.
These reviews and photos can be used for marketing and promotion for the platform
as well. These strategies that can be adopted by the business sharing platform allow
the platform differentiate itself from competitors and grow.
References:

Mi, Z., Coffman, D. (2019). The sharing economy promotes sustainable societies.
Nature Communications, 10, 1214. https://doi.org/10.1038/s41467-019-09260-4

Rinne, A. (2019, January 4). 4 big trends for the sharing economy in 2019. World
Economic Forum. https://www.weforum.org/agenda/2019/01/sharing-economy/

Sneader, K. & Singhal, S. (2021). The next normal arrives: Trends that will define
2021-and beyond. McKinsey & Company. https://www.mckinsey.com/featured-
insights/leadership/the-next-normal-arrives-trends-that-will-define-2021-and-
beyond

Tourism Commission (2018). Tourism Performance in 2018.

https://www.tourism.gov.hk/en/tourism-statistics-2018.php