Rentals online is a new concept. It is about providing access and comfort to consumers. These services are as much about saving money as they are about convenience.
They give you access to various products including home appliances at a fraction of the cost and also provide complimentary services such as pick-up and drop.
Renting itself is not a new phenomenon. Car, bike, video, furniture and book rentals are quite commonplace. For instance, individuals who had jobs where they had to shift base every two-three years used to rent furniture even 25 years back.
The business is now not just taking a more structured form but also expanding to include everything from clothes and accessories to home appliances on rent.
This concept is now referred to as the shared economy. It includes peer-to-peer finance, online staffing, peer-to-peer accommodation, car sharing and music and video streaming. According to PricewaterhouseCoopers, the sharing economy will generate potential revenue of $335 billion by 2025 globally.
In India, just the market for rental of furniture is seen at around $800-850 million. Rentals of electronic appliances are a $500 million market.
For the young consumer, who wants everything now, irrespective of their income, rentals provide immediate access at a cheaper cost.
Today a 25-30-year-old is still not sure of what city they want to settle down in, yet they want to have access to everything even though it may not be in line with their income. They don’t want to wait for a couple of years to buy it. This is why the demand for the access economy is growing.
In the last three years, close to 100 online rental service providers have come up that provide everything from furniture to home appliances, bikes, car and, books to clothes, toys and even diamond jewellery on rent.
Two-thirds of these firms have come up in 2015 alone. Their target user is someone who wants a good lifestyle with surplus disposable income.
Almost 70% of the users are men and these are people who are on the move which means they don’t stay in one place for more than two years. This generation wants a fancy lifestyle and doesn’t believe in hoarding. There are young professional who work in companies that demand them to move cities. There are those who are looking for different experiences and hence change jobs. The concept of working in the same organization for 25-30 years has long faded for the demography of 25-35 years old,
Traditionally, Indians have a preference for owning. Be it a house, a car, expensive jewellery or good clothe or appliances. This mindset is also changing now, albeit slowly.