The business models of these startups centre around minimal inventory and collaborating with designers on a revenue sharing basis with the aim of a 100% return over the apparel’s lifecycle. Logistics (drop and reverse pickup) ideally contribute to around 40% of the costs per order.
The golden rule for any startup lies in addressing a problem, but do apparel rental startups in India address an existential problem? For the price conscious shopper, the unorganised retail sector in India fulfil most demand gaps followed by the emergence of the bridge to luxury segment for aspirational shoppers. Not to forget, the seasonal sales across brick and mortar stores reduces the plausibility of a customer wanting to rent a garment online.
Despite factors like no deposits, delivery within 3 hours and easy reverse pickup and tie-ups with high end designers, the road ahead for Flyrobe is a tough one. With rapid expansion of fast fashion international brands (H&M, Forever 21, Zara), heavily discounted options available on e-commerce majors, and conscious Indian customers shying away from wearing used garments (try envisioning an Indian bride wearing rented bridal wear), creating an apparel e-commerce rental roadmap in India is a daunting task.
On the sidelines is brewing yet another storm in the form of a marketplace for buying and selling ‘gently’ used items with players like Elanic Services, Exchange Room, Envoged & Spoyl trying to garner demand for this niche service.
This article is written by MISB Bocconi PGPB4 student Saroj Javeri and it first appeared on MISB Bocconi Blog.
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