Market map: Sharing economy & product-as-a-service — the categories that will matter next

The global sharing economy was valued at approximately $570 billion in 2025, according to PwC, with product-as-a-service (PaaS) models growing at nearly 25% annually across industrial equipment, consumer electronics, and fashion segments. Yet adoption remains concentrated: fewer than 12% of manufacturers in emerging markets offer any form of access-based model, and total utilization rates for shared assets hover around 35% to 45% in most categories. As circular economy regulation tightens and consumer preferences shift toward access over ownership, the categories within this landscape are diverging sharply. This market map identifies the solution segments gaining traction, the companies defining each category, and the whitespace opportunities executives should prioritize through 2028.

Why It Matters

Sharing economy and product-as-a-service models address one of the most stubborn problems in sustainable consumption: the underutilization of physical assets. The average consumer drill is used for 13 minutes across its entire lifetime, according to research cited by the Ellen MacArthur Foundation. Industrial equipment utilization in manufacturing averages 40% to 55%. PaaS models convert these idle assets into revenue-generating services, reducing the total number of products manufactured while maintaining or increasing access.

Three structural forces are reshaping this landscape. First, the EU Ecodesign for Sustainable Products Regulation (ESPR) incentivizes product longevity, repairability, and reuse, all of which align naturally with PaaS business models. Companies that retain ownership of products have stronger economic incentives to design for durability. Second, digital infrastructure has matured to a point where IoT-enabled asset tracking, predictive maintenance, and usage-based billing are commercially viable at scale. The cost of embedding connectivity into industrial equipment dropped by over 60% between 2020 and 2025. Third, Scope 3 reporting requirements under CSRD and SEC rules are pushing procurement teams to evaluate the lifecycle emissions of purchased products versus leased alternatives, creating a compliance-driven demand signal for access models.

For executives in emerging markets, these trends represent both opportunity and challenge. Consumer segments in India, Southeast Asia, and Sub-Saharan Africa often leapfrog ownership models entirely, adopting shared mobility, pay-per-use energy, and clothing rental before mass ownership phases take hold.

Key Concepts

Product-as-a-service (PaaS) is a business model in which customers pay for the function or outcome a product delivers rather than purchasing the product outright. The manufacturer retains ownership and responsibility for maintenance, repair, and end-of-life management. Examples range from lighting-as-a-service (Signify) to engines-by-the-hour (Rolls-Royce).

Asset utilization rate measures the percentage of time a shared or leased asset is actively in use. Higher utilization rates improve unit economics and reduce the environmental impact per unit of service delivered. Best-in-class shared mobility platforms achieve 50% to 65% utilization, while equipment-sharing platforms average 30% to 40%.

Reverse logistics infrastructure refers to the systems required to collect, refurbish, and redistribute products at the end of a use cycle. Effective reverse logistics is the operational backbone of PaaS models, and its absence is the primary bottleneck in emerging markets.

Platform-mediated sharing connects owners of underutilized assets with potential users through digital marketplaces. This peer-to-peer model differs from corporate PaaS in that asset ownership remains distributed. The model works best for high-value, intermittently used items such as vehicles, tools, and event equipment.

Subscription commerce overlaps with PaaS but typically involves recurring delivery of consumable or rotating products (clothing, personal care) rather than access to durable assets. The sustainability impact depends on whether subscription models reduce total production or simply shift purchasing patterns.

What's Working

Industrial equipment-as-a-service is scaling profitably. Manufacturers of heavy machinery, HVAC systems, and industrial lighting have found that retaining product ownership improves customer lifetime value while reducing material throughput. Signify (formerly Philips Lighting) has converted over 2,500 commercial customers to its light-as-a-service model, in which the company owns, maintains, and upgrades lighting systems. Customers pay per lux delivered. Signify reports that this model reduces energy consumption by 50% to 70% and extends equipment life by 75% compared to traditional purchase-and-replace cycles. Rolls-Royce's TotalCare program, covering more than 4,500 engines globally, charges airlines per flight hour and uses predictive maintenance data to optimize engine performance. The program has achieved a 25% reduction in unplanned engine removals since 2020.

Shared mobility has reached critical mass in emerging markets. Ride-hailing and vehicle-sharing platforms in India, Southeast Asia, and Latin America have demonstrated that sharing models can outpace traditional ownership. Ola in India operates a fleet of over 250,000 vehicles, while Grab in Southeast Asia processes more than 10 million rides per day across eight countries. These platforms bypass the infrastructure requirements of private vehicle ownership (parking, insurance, maintenance) and serve populations where per-capita vehicle ownership remains below 50 per 1,000 people. Electric two-wheeler sharing platforms like Yulu in India have deployed over 30,000 vehicles across 10 cities, achieving utilization rates above 55%.

Fashion rental and resale platforms are proving unit economics. The global secondhand and rental fashion market reached $218 billion in 2025, according to ThredUp. Platforms like Rent the Runway (US), By Rotation (UK), and Flyrobe (India) have validated consumer willingness to pay for access to clothing without ownership. Rent the Runway reported positive adjusted EBITDA in Q3 2025, serving over 160,000 active subscribers. In India, Flyrobe's pivot to occasion-wear rental has achieved 70% repeat customer rates in the wedding segment.

B2B equipment sharing platforms are reducing capital expenditure. Construction, agriculture, and logistics sectors are adopting platform-mediated sharing for high-value, intermittently used equipment. DOZR, a construction equipment marketplace operating in North America, connects over 3,000 equipment owners with contractors, reducing average idle time from 65% to 30%. In India, EM3 AgriServices provides farm equipment on a pay-per-acre basis to smallholder farmers, reaching over 500,000 farmers across seven states without requiring them to purchase tractors or harvesters.

What's Not Working

Consumer sharing platforms for household goods have struggled with unit economics. Peer-to-peer sharing of tools, appliances, and household items has failed to scale in most markets. The transaction costs of listing, coordinating handoffs, and managing damage exceed the value of sharing low-cost items. Fat Llama (UK) and Peerby (Netherlands), two prominent household goods sharing platforms, have both scaled back operations or pivoted to higher-value verticals since 2023. The fundamental problem: for items under $200, the inconvenience cost exceeds the rental savings.

Reverse logistics gaps limit PaaS in emerging markets. Product-as-a-service requires efficient systems for collecting, inspecting, refurbishing, and redeploying products. In markets with fragmented logistics infrastructure, these systems are expensive to build and operate. Furniture rental startups in India, including Furlenco and Rentomojo, have faced margins compressed by high logistics costs, estimated at 20% to 30% of revenue compared to 8% to 12% in mature markets.

Subscription fatigue is reducing consumer engagement. Consumer subscription models for physical products face increasing churn rates. A 2025 McKinsey survey found that 42% of consumers in Asia-Pacific have canceled at least one product subscription in the past year, citing cost accumulation and low perceived value. Fashion subscription services in particular face return logistics costs that erode margins: return rates average 35% to 45%, with associated processing costs of $8 to $15 per item.

Regulatory frameworks for shared asset liability remain underdeveloped. Questions around product liability, insurance coverage, and consumer protection for shared and leased goods are unresolved in most emerging market jurisdictions. In India, the absence of a clear regulatory framework for electric vehicle sharing has led to inconsistent insurance requirements across states, increasing operating costs for companies like Yulu and Bounce by 10% to 15%.

Data interoperability between platforms is limited. Shared economy platforms operate in silos, with proprietary user verification, asset tracking, and transaction systems. This fragmentation prevents cross-platform asset optimization and forces users to maintain separate accounts and profiles across services. Industry-wide standards for shared asset data are virtually nonexistent.

Key Players

Established Leaders

• Signify (formerly Philips Lighting): Pioneer of light-as-a-service. Operates PaaS contracts across 70+ countries with over 2,500 commercial customers. Revenue from circular services exceeded EUR 900 million in 2025.
• Rolls-Royce: TotalCare engine-as-a-service program covers more than 4,500 engines, representing over 50% of the wide-body engine market. The model generates approximately 55% of civil aerospace revenue.
• Hilti: Tool fleet management program leases construction tools to contractors on subscription, covering maintenance, replacement, and theft protection. Serves over 300,000 customers globally.
• Caterpillar: Cat Financial and Cat Rental Store provide equipment-as-a-service across construction and mining. The company's remanufacturing division processes 130 million pounds of returned components annually.
• Grab Holdings: Dominant shared mobility platform in Southeast Asia with operations across eight countries. Processes over 10 million rides daily with a growing electric vehicle fleet.

Emerging Startups and Platforms

• DOZR: B2B construction equipment marketplace connecting owners with contractors. Operating across North America with over 3,000 equipment suppliers.
• Yulu: Electric two-wheeler sharing platform in India with 30,000+ vehicles deployed across 10 cities. Focused on first-mile/last-mile urban mobility.
• EM3 AgriServices: Pay-per-acre farm mechanization for Indian smallholders, serving 500,000+ farmers. Backed by Mahindra and provides equipment access without capital expenditure.
• By Rotation: Peer-to-peer fashion rental platform in the UK with over 350,000 listed items. Targets premium and designer fashion segments.
• Grover: Consumer electronics subscription platform in Germany, offering laptops, smartphones, and gaming equipment on monthly rental plans. Serves over 500,000 subscribers.

Key Investors and Funders

• SoftBank Vision Fund: Major investor in shared mobility platforms including Grab, Ola, and Getaround. Portfolio companies collectively serve over 500 million users.
• Ellen MacArthur Foundation: Non-profit accelerating circular economy business models. Provides frameworks and network support for PaaS adoption through its Network of over 200 companies.
• European Investment Bank (EIB): Financing PaaS infrastructure and circular economy ventures in the EU through the Circular Economy Finance Support Platform. Committed EUR 4.5 billion to circular economy projects between 2020 and 2025.

Action Checklist

1. Assess product portfolio for PaaS viability. Identify products with high purchase price, low utilization rates, and significant maintenance requirements. These are the strongest candidates for conversion to service models.
2. Map reverse logistics capabilities. Evaluate existing collection, refurbishment, and redistribution infrastructure in target markets. Partner with third-party logistics providers where internal capabilities are insufficient.
3. Pilot IoT-enabled asset tracking. Deploy connectivity solutions on leased or shared products to monitor utilization, predict maintenance needs, and generate usage-based billing data. Start with high-value industrial assets.
4. Evaluate liability and insurance frameworks. Review regulatory requirements for shared and leased product liability in each operating jurisdiction. Engage insurers to develop product-specific coverage for PaaS portfolios.
5. Design for durability and serviceability. Align product design with PaaS requirements: modular components, standardized repair procedures, and material choices that support refurbishment cycles.
6. Benchmark utilization targets. Set utilization rate targets for shared assets (minimum 40% for industrial equipment, 50% for vehicles) and implement demand management strategies to achieve them.
7. Explore emerging market partnerships. Identify local distribution and service partners in India, Southeast Asia, and Africa who can provide last-mile reverse logistics and customer support at lower cost.

FAQ

Which product categories are best suited for product-as-a-service? Products with high upfront costs, low individual utilization rates, significant maintenance requirements, and long technical lifespans are ideal candidates. Industrial lighting, heavy construction equipment, commercial HVAC systems, and premium electronics consistently demonstrate the strongest PaaS unit economics. Consumer products under $200 with high usage frequency are generally poor candidates due to transaction cost overhead.

How does PaaS affect Scope 3 emissions reporting? Under CSRD and GHG Protocol guidance, companies purchasing products report associated emissions in Scope 3 Category 1 (purchased goods). When switching to PaaS, the emissions accounting shifts: the PaaS provider reports manufacturing emissions, while the customer reports only use-phase energy consumption. This can reduce a buyer's reported Scope 3 footprint, but it does not eliminate actual emissions. Companies should evaluate total lifecycle emissions rather than focusing solely on reporting boundary shifts.

What are the biggest barriers to sharing economy growth in emerging markets? Three barriers dominate. First, reverse logistics infrastructure is fragmented and expensive, with collection and redistribution costs 2x to 3x higher than in mature markets. Second, regulatory frameworks for shared asset liability and insurance are underdeveloped, creating legal uncertainty. Third, digital payment penetration, while growing rapidly, is still insufficient in rural areas to support frictionless usage-based billing. Mobile money platforms (M-Pesa, PhonePe) are partially bridging this gap.

How do PaaS models impact manufacturer profitability? PaaS typically reduces short-term revenue from product sales but increases customer lifetime value through recurring service fees, higher retention rates, and parts/maintenance revenue. Signify reports that PaaS contracts generate 20% higher lifetime margins than product sales. However, the transition requires significant upfront investment in balance sheet capacity (owning inventory), service infrastructure, and digital platforms. Most manufacturers require 18 to 36 months to reach breakeven on PaaS programs.

Sources

1. PwC. "Sharing Economy: Global Market Sizing and Growth Forecast 2025." PwC Strategy&, 2025.
2. Ellen MacArthur Foundation. "Product-as-a-Service: Business Model Innovation for the Circular Economy." EMF, 2025.
3. ThredUp. "Resale Market and Consumer Trend Report 2025." ThredUp, 2025.
4. McKinsey & Company. "The State of Consumer Subscriptions in Asia-Pacific." McKinsey, 2025.
5. EcoVadis. "Sustainable Procurement Barometer: Supplier Requirements and Standards Adoption." EcoVadis, 2025.
6. Signify. "Annual Report 2025: Circular Lighting and Service Models." Signify N.V., 2025.
7. Rolls-Royce Holdings. "TotalCare Program Performance Review." Rolls-Royce, 2025.