Alibaba in­vests in clothes-shar­ing plat­form YCloset

China Daily European Weekly - - Busi­ness - By OUYANG SHIJIA ouyang­shi­jia@chi­nadaily.com.cn

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.”

LIU MENGYUAN

CEO of YCloset

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