Believe it or not, sharing’s in fashion
Okay, let’s check out the many faces of sharing economy, shall we?
Ride-hailing. Tick. Homesharing. Tick. Home-cooked food. Tick. Short-distance bicycle rides. Tick. Tick, tick, tick. Fashion? Before you blurt out “Are you out of your mind?”,pause.
Several clothing rental platforms have emerged in China and are doing well already.
(Come to think of it, it’s not such a terribly new concept either. In the West, firms that rent out expensive tuxedos for black-tie parties are dime a dozen. Only, the new angle is, the business is online now.)
In China, clothing rental services could be divided into two categories: high-end luxury dresses and everyday clothing.
Liu Mengyuan offers the latter variety. Her Yi23.net provides subscription-based rental clothing service for women, especially those aged 22 to 35, in first- and second-tier cities in China, including Beijing, Shanghai, Guangzhou and Shenzhen.
“It is a huge market,” said Liu. “So huge its sales will exceed 1 trillion yuan ($145 billion) in the foreseeable future. Since most (fashion) brands (we offer) are produced in China, Yi23 spells convenience for our customers. And the large population of China is a big opportunity for us.”
Liu must know. She worked in the fashion industry for 12 years. She believes women love wearing more, not less, clothes in their lifetime.
“By means of sharing economy, I want to share the fashion apparel with more people. Ordinarily, white-collar women may need luxury dresses for formal occasions twice a year, which is not their primary need. I want to first solve their biggest pain point.”
Founded in 2015, Yi23 offers users nearly 100 brands and different subscription plans. On Nov 11 (Singles Day shopping festival), it offered a discount of 188 yuan a month for customers renting three items at a time. billion
Yi23 serves 35 cities in China, and has more than 10,000 members. They can keep the clothing items they rent as long as they want, and then ship them back for free and order new ones.
The company has received several rounds of financing, including more than $10 million in funding from investors led by IDG capital in April. Earlier, angel investor Wang Gang and GSR Ventures had pumped in several millions.
A netizen named “Xiaotang’s Secret” commented on Zhihu, a Chinese website akin to Quora, that she likes the apparel styles on Yi23, especially those by independent designers. This could reduce the chances of others wearing similar or identical dresses on the same day, she said in her online post.
According to a sharing economy development report, jointly released by the State Information Center and the Internet Society of China, sharing economy platforms have created a market worth 1.95 trillion yuan in 2015. China’s sharing economy is expected to account for over 10 percent of gross domestic product by 2020. China’s GDP was 67.7 trillion yuan ($9.8 trilion) in 2015 and is projected to grow 6-7 percent annually over the next few years.
Li Hao, an analyst at iResearch Consulting Group, said with consumption patterns reflecting upgradation, fashion as part of the sharing economy may just work well.
That doesn’t mean there are no challenges. “Users may have hygiene concerns. If clothing rental companies don’t maintain enough inventory, user experience will be affected. Costs are key, too.”
According to Liu, Yi23 is expected to turn profitable in six months as members increase. “In April, we had only one-tenth of members we have today. Currently, the frequency at which 98.5 percent of our clothing items are rented is quite high.”
estimated sales of clothing rental services in China in the near future