If you’re looking to build a wardrobe from scratch, and you are hard-pressed for cash, you may want to consider renting clothes rather than buying them. The online rental space has come as a boon for fashion enthusiasts worldwide. Today, everything from designer outfits and home décor products to furniture, is available for rent, on a pay-per-use basis.
Shilpa Bhatia, who has been part of the online rental industry for almost 10 years now, came up with her venture, The Clothing Rental, when such businesses were few and far between. “I was styling a lot of ads and movies back then. At that time, top brands like Guess and Mango did not exist. The best brand then was probably Benetton. People had expectations of a certain type of look, which influenced high fashion brands and looked very classy and stylish. But, they were not willing to pay top dollar for big brands and instead wanted customised clothing options from Indian sources,” she tells Guardian 20.
There were of course teething troubles. Bhatia continues: “Initially, people thought that my concept was strange. Everyone had trouble understanding my business because according to them, no one would wear clothes that were worn by someone else. People also had a misconception about the type of clothes that I was keeping. Rented clothes for them meant getting fancy dress costumes like a cop uniform for example. People had no idea about the quality of clothes that my store was providing. I am trying to change the stereotype about rented clothes by informing the masses that even beautiful and fashionable clothes can be rented.”
These new rental businesses have since posed a serious threat to traditional retailers as rental websites lowers the cost of the products compared to the retailers. A lot of people cannot afford high-end brands. And making these clothes available on rent opens up a new market segment for luxury brands.
Sabena Puri, CEO of Stage3, India’s leading fashion styling and rental platform, says, “The fashion rental business model is one of the most lucrative. Our internal rate or return, commonly known as the IRR, on our inventory at steady state is 144%. Few companies in the startup ecosystem can boast similar unit economics.”
Driven by demand and technology, different companies have different renting policies. “The average rental price is 10-15% of the retail price of the product. The security amount is usually 50% of the rental. Pricing is figured out on the perceptions of the clients’ likes and dislikes. Fabric, colour and styles impact pricing. When you order, you have to give a security deposit twice the rental cost of the garment and this is refunded when the outfit is returned,” says Shilpa Bhatia.
“If a product is damaged beyond repair while out on rent, we decide costs on a case-to-case basis. The shipping charge is specified separately for every product. For multiple products ordered, the programme adds up the total of all individual shipping charges. Thus, a customer who orders three products is charged the total of all individual delivery charges associated with each product. Thus the delivery fee is calculated separately when a customer orders different products,” she adds.
Also, the customer has the luxury of keeping the outfit for any number of days, depending on their needs and preferences. “For instance, if someone is travelling out of the country for two weeks, she can keep the outfit for that period of time and the rental charges will vary depending on the number of days. In general though, rentals are for either three days or six days,” explains Sabena Puri.
This has also been one of the biggest examples of the sharing economy between the rental companies and the designers. Fashion rentals are an integral part of the sharing economy. In the age of Facebook and Instagram, nobody wants to be photographed in the same attire. Therefore, 21st century fashion is all about young millennials renting fashion experiences rather than owning a wardrobe that they may soon get bored of.
“It was the first time the Indian market was being introduced to the idea of renting furniture in an organised way. And yes, it did have its challenges. The biggest challenge was to conquer people’s perception about rental furniture that it is ‘used’ or ‘second-hand’ and probably worn out over time.”
Besides, rental business is not restricted to garments. One can hire even furniture according to their taste and preference. As the first company to introduce furniture rentals in India, Furlenco has seen this sector evolve. Considering the mindset of prospective buyers, they strategised their approach and planned their expansion across cities, instead of a multi-city approach.
Ajith Mohan Karimpana, founder of Furlenco, says, “Back in January 2010, I was in the process of moving back to India. Having been settled in the US for close to nine years, there were obviously quite a lot of things to move. But the cost of relocating furniture across three continents was far more expensive than buying new furniture here in India. So, I sold everything and moved to Bengaluru. I didn’t really add up so I decided to sell my furniture. Once in Bengaluru, furniture-sellers took me for a ride and I was left quite disappointed with the experience. Since I had no immediate plans of settling down in Bengaluru, I thought of the idea of renting furniture. But to my surprise, there was no one in the organised sector catering to this need. This was the trigger and I started ‘Rent Ur Duniya’ in 2011 which later became Furlenco.”
The products are provided on rent for 18 months on an average in Furlenco. But was it easy to convince people that one can rent furniture instead of buying it? Karimpana says, “It was the first time the Indian market was being introduced to the idea of renting furniture in an organised way. And yes, it did have its challenges. The biggest challenge was to conquer people’s perception about rental furniture that it is ‘used’ or ‘second-hand’ and probably worn out over time. We overcame that issue with our brand promise that if you don’t receive ‘like-new’ showroom quality furniture, you can reject the items. Other areas of concern included pricing a product for renting, given the fact that rentals were being introduced for the first time in India. It became crucial to price the product in such a way that was not only appealing to the customers, but also didn’t pass off as cheap or low-quality.”
Although the customer base of Furlenco is now expanding, it’s is still a long way from the ideal-case scenario where a majority of people take naturally to renting. Karimpana says, “We would say that furnishing over 20,000 houses across just three cities can be considered as a success. But we have a long way to go to make renting a way of life across the country.”