Power bank rental in China a hit with cell phone users

Status: 01/22/2022 3:04 p.m

The mobile phone battery is empty? No problem in China: there are power banks to borrow everywhere. This is also necessary, because almost nothing works in China without a smartphone.

By Eva Lamby-Schmitt, ARD-Studio Shanghai

It’s busy every morning at this small cafe in Shanghai. At 9 a.m., it’s very busy here, like all the Chinese breakfast shops that line the narrow street. What all shops have in common: Small green, white or yellow boxes are either in front of the shop, at the checkout or in the back corners of the cafés. Here, customers can borrow power banks to quickly charge their smartphones.

Eva Lamby-Schmitt
ARD-studio

“The smartphone is used for everything these days”

Most customers find this very useful. “It’s too heavy to lug around a power bank, so the easiest way is to be able to borrow one,” says one café visitor. “You can use them wherever you are. The battery on a smartphone runs out quickly. I use social media, check emails and take photos.” And another woman agrees: “The battery runs out quickly, and sometimes you’re in an emergency situation. Today, the smartphone is used for everything – for example for the health code,” she explains. “So for emergencies, power banks come in really handy. And they’re pretty cheap.”

To rent a power bank, you have to scan a QR code and use your smartphone’s payment function to pay a small amount, usually less than one euro. Then the power bank pops out of the box, you can take it with you and use it to charge your phone. Matching cables are included. You can hand in the power bank directly on site, but also somewhere else in another box.

Providers and lenders make fifty-fifty

There are several suppliers in China. Their names are Energy Monster or Xiao Dian – and they have one thing in common: they don’t want to talk to journalists. Instead, a café owner explains how the business model works and what he gets out of it. “We have an agreement with the providers of the power banks. They can set up their devices here, use our electricity and we share the profit 50:50,” says the businessman. “Suppose a customer spends 10 Chinese yuan on charging, then the provider gets five yuan and I get five yuan.” He earns the equivalent of ten to 30 euros a month.

For the power bank vendors making the same profit per device, that profit margin seems small. And yet a whole network of such power bank stations has developed in China. The market leader Energy Monster had set up rental stations at more than 664,000 locations by the end of 2020 – with more than five million power banks.

IPO without much response

The company went public in the US almost a year ago; however, investors appear to be cautious. Oscar Ramos, a business consultant in Shanghai for start-ups in the Chinese market, nevertheless thinks that the model is financially viable. “I think an important point is that a lot of electronic devices are made in China. This means that the basic cost of all these products is really very affordable,” explains Ramos. “So you don’t have to factor in the logistics and the cost of shipping to other places.”

The hurdles for this service are very low. “If you look at how much a power bank costs in Europe or a power bank here, the prices here are very, very cheap,” says the start-up consultant. “So the cost-effectiveness of this concept is very good.”

Chinese mobile phone use not comparable to German

However, the Chinese market and the demand for power banks are not comparable to the market in Europe, says Ramos. People in China would use up their mobile phone batteries twice as fast as in Europe. This is due to the many apps that are used in everyday life.

Thomas Derksen from Germany, who has been living in China for several years, knows that too: “If the battery is empty here, your heart starts racing a bit,” he says. Because then you can no longer take the subway if you no longer have electricity – you can no longer ride a bicycle and simply pay nothing. “That’s the way it is, it’s very, very important,” said Derksen. “I hardly know anyone in my circle of acquaintances and friends whose cell phone battery lasts all day.”

In Germany, on the other hand, not everything revolves around smartphones. For example, cash payment is still possible. In China, on the other hand, not all sellers accept cash any longer, or they simply don’t have any change. Experts believe that the rental model with power banks is not worthwhile in Germany because the costs are too high and power banks are not in demand to the same extent.

Charging smartphones in China – Powerbanks to go

Eva Lamby-Schmitt, ARD Shanghai, 14.1.2022 · 13:14

Reference-www.tagesschau.de

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