China’s stumbling economy has de-fanged Smart Share Global Ltd. (EM.US), better known as Energy Monster for its cabinets of smartphone chargers that are a fixture in stores, restaurants and other retail outlets around China. That’s the bottom line coming from this former highflyer, which on Monday announced a management-led buyout offer for the company.
Energy Monster is the latest victim of China’s “consumption downgrade,” which has seen consumers increasingly rein in their spending in a climate of growing economic uncertainty. The downgrade began last year at the top of the retailing food chain, as sellers of big-ticket items like cars and smartphones started to notice shrinking sales. From there it has gradually moved into cheaper, more everyday purchases like clothing and coffee.
Now, its move into the market for rented smartphone chargers really does seem like the downgrade has affected the entire economy. After all, such charging services are quite cheap, typically costing just 3 yuan, or less than $0.50, for a half-hour charge. You know things are bad when consumers are cutting back on such little everyday purchases that they probably wouldn’t have even thought twice about in the past.