The Shenzhen-based start-up was based on a similar concept to bike-sharing businesses, where users have an app on their smartphone allowing them to pay a deposit fee.
To rent a Sharing E Umbrella, people paid a 19 yuan deposit, around $3.70, plus 50 jiao, or less than 10 cents, for every half hour of use.
It started operations across 11 cities.
Sharing E Umbrella CEO Zhao Shuping told the South China Morning Post newspaper that after giving out their umbrellas at train stations, he soon realised that the most logical place to store them would be a fence or railings where they could be hung.
Each lost umbrella costs the company 60 yuan, close to $12, to replace.
Despite the loss of almost 300,000 umbrellas, Mr Zhao said his plans to release a phenomenal 30 million umbrellas by the end of the year will go ahead.
China’s citizens can rent almost anything, from mobile phone chargers to telescopes and even girlfriends.
The country’s share economy more than doubled from 2015 to 2016 alone, with an annual projected growth of 40 per cent in the years ahead.
Smartphone apps like Alipay and WeChat mean anyone can buy products or transfer money just by scanning a QR code.
Analysts have warned that the market is in danger of surplus, with some start-ups not surviving past the first few years.
Start-up Wukong Bicycles was forced to close down after losing 90 per cent of its bikes, most presumed stolen.
The most visible of these rental markets has been bicycles, with consumers picking them up and leaving them wherever they like. It’s estimated around 10 million of these rent-a-bikes are now on China’s streets.
But it has also sparked a backlash, with complaints about wayward bikes clogging up roads and pavements.
Local governments have been told to come up with new regulations for the industry. In the cities of Shanghai and Tianjin rules are being introduced to limit a bicycle’s service life to three years and require companies to hire at least one maintenance employee for every 200 bikes, according to state news agency Xinhua.
This hasn’t stopped billionaire Jack Ma from ploughing funds into bike-sharing start-up Ofo, which recently set a new fundraising record of $920 million ($700 million US). This brings its total financing to around $2 billion US ($2.63 billion AUD).
- with wires
