Online clothing rental market set to boom: says report
An Alliance Market Research survey predicted that online clothing rental market would register compound annual growth rate of 10.6%, reaching $1856 million by 2023.
A rapidly growing market, online clothing rental is said to be gaining popularity within developing economies in Asia Pacific, due to the need for an economic option.
Increasing popularity of e-commerce further welcome start ups to this business.
Renting your wardrobe could prove cheaper, trendier
Online clothing rentals
Online rental services are expected to be utilized by those who are fashion conscious, but lack finances to procure clothing items. Rental services are considered cost effective especially for women.
Ethnic wear is an item of particular interest in the market. Ethnic wear rental market is expected to expand given increasing incidence of festivals and other events and high costs associated with them.
How was the report prepared?
The report has incorporated data from interviews with top officials as well as online/offline research and expert consultations. Major companies including American companies Lending Luxury and Le Tote, Indian companies Secret Wardrobe and Shared Wardrobe and Brazilian company Dress &Go were profiled.
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What drives the market?
North America and Europe hold the highest market share. Asia Pacific is third with a projected CAGR at 11.4%.
Online rentals are expected to catch on in developing Asia Pacific economies including India and China due to increasing purchasing power complemented by dearth of economical fashionable options.
Increased social acceptance for rentals and flourishing e-commerce facilitated by a technology boom also helped the market.
Booming online rental businesses in India
Start-ups have been mushrooming in India's online fashion rental space, with the existing ones attracting seed funding.
Increasing preference for high-end fashion goods alongside a lack of affordable options have made room for major ventures including Flyrobe, Swishlist and Klozee.
Often charging a security deposit along with the rental fee, the order is delivered anywhere between 3 hours and 2 days.
Imagine no possession
While North America is the market leader, Asia Pacific is soon purported to catch up through demand driven growth fuelled by India and China.
While women's market share comes up to 58%, number of male consumers is projected to increase. Ethnic wear along with the western wear segment is further expected to increase market share.
The market can trigger a "no ownership" fashion culture.
Will the Indian market reach its potential?
Often selling major brands and designer wear, the start-ups are booming when Indians get smarter about their fashion expenses. Further consumers exhibit a decreasing propensity to spend on luxury one time events like festivals or bachelor parties.
Societal pressure to appear fashionable might potentially end financial culture structured around long term investments, to one that provides a cheaper, yet larger array of options.
Recovery: The down side
Shilpa Bhatia, an early entrant in the rental market, notes cost recovery is challenging, "We also have to look after the maintenance of the garment. I remember purchasing a gown worth Rs. 4 lakh and there were no takers. How do I recover that money?"