Why Shared Power Bank Is A Bad Idea?

Recently, it was reported that Jumei’s CEO Chen Ou has invested ￥300 million in the shared power bank company ANKER, now holding 60% of the company’s shares. Chen Ou will become the company’s board chair. Chen also revealed in the phone interview that Jumei would pour in another several billions in the upcoming three months to push the establishment of ANKER, the infrastructure production and distribution. JD’s founder and billionaire Wang Jianlin’s son Wang Sicong subsequently commented on this new move: “If shared power bank could take off, I will eat some turd.”

Chen Ou responded to Wang’s comment that he appreciated Wang’s comment, and that no every project could eventually take off as kickstarting a business and succeed is very rare. If the shared power bank street failed in the end, it could become a non-profit project, Chen added. “I just hope that your personal opinion will get in the way of this project entering Wanda.”

Although netizens are really wishing to see Wang Sicong swallow some turd, it’s very unlikely it would happen since he is betting on shared power bank. Many might think that Wang Sicong is one of those rich brats that only knows to party and make sarcastic and over-the-top comments on news events. But in fact, Wang Sicong does have a business mind and his asset has grown to ￥4 billion after investing in ￥500 million to establish five listed companies. It’s unlikely that Wang’s comment on shared power bank is merely random. Perhaps his father Wang Jianlin also believes shared power bank projects are absurd at nature.

From investors’ perspective, shared power bank business can generate return fast with low attrition rate and cost. This business model of shared power bank needs to establish cooperation with offline infrastructures like shopping malls and subways etc., or even sign exclusive agreement. It’s a fierce competition in which shared power bank providers race to spread out their products, penetrating offline scenarios and acquiring users. Whoever achieves that will win the fight. However, this logic is quite superficial.

I have written many articles regarding why shared power bank would not take off, listing out reasons and judgment that are very easy to see if with rationality and common knowledge:

Firstly, all phone users need to recharge their phone, however it doesn’t necessarily make shared power bank a rigid demand. We already have mobile power bank that are light and small to carry around and phone batteries are getting better. In most use cases, a smartphone can last through the day.

Secondly, it’s not common for users to encounter situations in which their smartphones run out of battery entirely. The rising shared power bank business is targeting such unusual demand.

What’s more, the phone industry is developing more advanced wireless charging and fast charging technologies, while the batteries are becoming better. It’s only a matter of time that smartphones can last for two days or even a week.

At the end of the day, it’s evident that investors and entrepreneurs in the shared power bank business are betting on the unlikely future where battery and charging technologies won’t have any major progress.
Some say that the advancement of fast charging technologies will bring about charging stations that allow consumers to plug in the charge for a couple of minutes and then they will be ready to go. This makes charging station a so much better investment field. If consumers are able to reach a charging station in a 500m distance and charge up their phone by 30%, it makes no sense to have shared power banks.