Alibaba invests in clothes-sharing platform YCloset
YCloset, a leading Chinese garment-sharing platform, has completed an undisclosed strategic fundraising round from e-commerce giant Alibaba Group Holding Ltd, to better cater to female users’ fashion requirements.
Proceeds from the new funding will be used to further tap into more consumption scenarios, expand the algorithm system and continue to build its warehouse and cleaning operation centers nationally, the company says.
The move also marks Alibaba’s latest attempt to promote the diversified development of its business.
YCloset CEO Liu Mengyuan says the company will further cooperate with Alibaba’s flea market platform Xiaoyu, e-commerce platform Taobao, Tmall, Alipay payments and other relevant platforms.
“The market is huge,” says Liu. “Clothes will always top the agenda of almost every woman. Compared with buying items in a store, clothes rental services will allow women to update their looks more frequently and wear more dresses that they could not afford to buy.”
Liu, who worked in the fashion industry for more than 10 years, aims to meet demand from China’s aspiring white-collar workers for everyday wear.
Beijing-based YCloset, founded in 2015, charges subscription fees, allowing users to rent clothes and accessories. The platform targets female users, especially those between the ages of 22 and 30, living in first- and second-tier cities in China, including Beijing, Shanghai and Hangzhou, Zhejiang province, meeting demand for office, party, dating and travel clothing.
The company says it has more than 15 million registered users and provides a wide range of subscription plans. For instance, it charges a monthly membership fee of 499 yuan ($73; 62 euros; £55), and users are able to rent an unlimited number of items during that period. It does not charge additional fees for delivery and cleaning, and users also can purchase garments they like via the platform.
Investors have shown enthusiasm for the latest addition to the sharing economy, pouring tens of millions of dollars into it. Last year, YCloset received $50 million in a series C fundraising round led by Alibaba Innovation Ventures, Softbank China and Sequoia China.
Li Hao, an analyst at iResearch Consulting Group, says that with the trend of upgrading consumption, garment sharing will meet consumers’ specific needs.
“However, there are also challenges ahead. Users will have concerns about hygiene. Other challenges include costs and how to keep sufficient inventory to offer better user experiences.” Li adds.
Liu says YCloset updates its inventory according to the season and current trends. It has four storage and cleaning centers, in Beijing; Nantong, Jiangsu province; Chengdu, Sichuan province; and Guangzhou, Guangdong province. Beijing-based Fornet, a leading domestic cleaning company, and Guangdong-based Tiantian Inc are its technical strategic partners.
“We will continue to expand garment and accessory ranges and offer diversified services,” Liu adds. “In the future, our platform will become a one-stop shop.”
“Compared with buying items in a store, clothes rental services will allow women to update their looks more frequently.”
CEO of YCloset