Ownership is highly overrated and today’s millennial population has conveyed it very efficiently. It's all about no ownership, more flexibility, and more affordability. And this ‘no strings attached and no restrictions’ feeling can be witnessed across categories – be it e-commerce, electronics furniture and even clothes wherein people are looking at owning a commodity for a limited period of time and then sending them back or getting something new in exchange for it.
Witnessing this change in consumer behavior, the retail industry has started working on these lines and thus a number of start-ups have emerged in the rental segment, renting out products to consumers for a said period of time along with added services of maintenance, delivery, etc. One such start-up to have excelled its renting game, even during the pandemic, has been Flyrobe.
Mumbai-based Flyrobe was acquired by AARK World owned Rent It Bae in 2019 and was merged into one to operate under the banner Flyrobe. The acquisition was done in order to consolidate operations, ramp up its omnichannel footprint and tap the overseas market.
According to Future Market Insights, global online clothing rental sales would grow at an 11 percent CAGR between 2021 and 2031. Sharing economy is the new in-thing across the world as also in India and according to research, by 2025, it is estimated that many areas of the sharing economy will rival the size of their traditional counterparts.
As per Technavio, the global online clothing rental market is expected to grow by US$ 990 million, at a CAGR of almost 10 percent during 2021-2025. While these numbers are from pre-pandemic times and Covid definitely has affected the segment, it is still bound for impressive growth in the times to come.
Move back in time a bit to the pre-pandemic era and like the West, India too had found its love for sharing economy and it had become a default choice for younger consumers. Even as the bets on this industry were off for a bit, it has started to revive with consumers getting back to renting.
Aanchal Saini, CEO, Flyrobe, maintains, “Though the number of weddings is less, the number of people renting for their weddings are more. The fashion rental business from the Indians perspective is a mindset change business and as we understand changing habits is tough. So a business like ours has to spend some years in addition to the cash on advertising and awareness in the space to achieve the goal. The pandemic has brought major financial insecurity for Indians whether or not people have lost their jobs/ have got pay cuts. Indians now are more cost-conscious than before, and this conservative behavior will stay for the next couple of years. And this will be a phase for the fashion rental businesses in the country to grow geometrically. Over the years, Flyrobe has seen traction in the C2C model and the pandemic further boosted the model. Today, people are doing away with clothes they are never going to use again; we are able to get products as new as 10 days old. Also, concepts of mindful consumption and environmental sustainability have started to creep in now wherein people are conscious about what and how they consume. And this is a boost for the fashion rental space.”
What’s up for Rent?
A fashion rental brand, Flyrobe which has an online and retail presence across the country, has seen its average order size go from Rs 2,500 (online) and Rs 5,000 (in-store) to Rs 3,000 and Rs 6,500 respectively, post-pandemic, when things started easing out. Flyrobe targets consumers who are aspirational and are also looking at experiencing rentals.
Aanchal Saini says, “Today our customer base is mostly millennials who prefer to rent because they don’t want to hoard, prefer to wear a product just once, avoiding the hassle of maintaining the outfits, sustainability factor, and of course its financially makes sense to rent a product at 10-15 percent of the MRP.”
So what is Fyrobe offering to its discerning consumer base? The rental platform offers lehengas, gowns, and anarkalis mostly and 10 percent trend categories like drape sarees, etc. for women; and sherwanis, Indo-westerns, suits, and tuxedos for men.
“Our inventory is divided into two categories: company-owned inventory and marketplace inventory. The marketplace inventory is further divided into two categories: designer-owned (B2C) where the designers put their products on rent via Flyrobe; and customer-owned (C2C), where we take expensive designer outfits from users and rent them via Flyrobe. In both these cases, the product owned gets a percentage of rent every time a product is rented and it is controlled by technology. They can check their earnings on their dashboards which are credited to their bank accounts every month. Some of the designer labels available at Flyrobe are Sabyasachi, Shantanu & Nikhil, Divya Reddy, Rimple & Harpreet Narula, among others. Retail brands too can be rented out on Flyrobe. We also have in-house labels called Niyoosh (for women) and Ekaksh (for men) with over 6,000 SKUs to choose from that have gained popularity over the last few years,” elaborates Aanchal Saini.
While the number of weddings has lessened now directly impacting the GMV at Flyrobe, the fashion rental company took some strategic steps to revive the business and is now witnessing good numbers in terms of unit economic profitability. Flyrobe currently retails through two experience centres (in Delhi and Bengaluru) and its online platform and registers 50 percent of its revenue from these offline retail outlets.
The Back-End Intricacies
It’s been more than a year since the pandemic brought events and get-togethers to a screeching halt, prompting much of the country to stay back home in their sweatpants and in the recent weeks, after the end of the second wave, there is a post-pandemic ebullience emerging which is giving the much-needed push to the fashion rental segment.
Even as the popular sentiment says that renting the clothes is an affordable and more sensible way to keep expenses in check, consumers are still sceptical on the hygiene concerns despite the fact that garments on these platforms are properly processed before being put up for rent.
Aanchal Saini asserts, “Hygiene has been a top priority since commencement in order to break the barrier and make people try out renting. All products are dry cleaned and steam ironed at the temperature of 80+ degrees to fight common colds, bacteria, etc. Renting from Flyrobe is like a hotel booking system. The user books the desired products in advance for a certain period. Post a quality/ size check, the order is confirmed. Thereafter, 10 days before the delivery date, the warehouse starts to prep for the delivery date based on the pseudo delivery date (warehouse works in advance). The product is altered, goes through a round of quality checks, steam ironed at 80+degree temperature, a final QC and packaging before shipping. Post this, once we receive the product back, a reverse QC process commences. The product is checked for any damages, goes for a round of major repairs, if any, before going for a round of dry cleaning. Post dry cleaning, another round of minor repairs, intensive steam ironing and then back to the barcoded inventory racking.”
While the renting process requires extensive quality checks and customer service, etc., the sourcing and curation of the entire collection at the platform is also an elaborate exercise that involves its merchandising team working ahead of the season to curate new products for the season.
“Around 30 percent of the inventory is based on traditional styles which are always in demand. Also, Flyrobe pays special attention to customer’s demands while adding inventories. For onboarding a designer or a brand, we look at the product style, it should be a rentable asset (valuable enough to fit the rental criteria), and fabrics should be sturdy to sustain multiple dry cleaning and repair rounds,” she states.
Flyrobe is one platform that puts high bets on technology and technological integration and 80 percent of the consumers who walk into a Flyrobe store, discover it online. The company caters to its consumer base through its website, mobile site and app.
“Technology is at the core of the business. All our back-end operations are controlled digitally. We also collect data on product popularity, colors, and styles in demand, etc., and work on it and this helps us improve our merchandise and have better rented and stocked goods. We are also working on virtual trials and while it hasn't been that great for ethnic products, it's a work in progress. The idea is to enable consumers to try products sitting in the comfort of their homes,” avers Aanchal Saini.
Flyrobe also relies on digital media for its marketing and promotional activities. It reaches out to new users through social media platforms like Facebook, Instagram and also Google ads while also onboarding influencers and celebrities to attract more millennial consumers. Flyrobe invests 20-30 percent of its revenue in marketing activities.
Challenges & Road Ahead
The months of lockdown and the subsequent precautionary measures in place in order to try and slow down and overcome the pandemic have been profoundly disrupting the clothing rental market and while many couldn’t restart operations until now, Flyrobe has adapted itself to the new normal and is out and about renting premium clothing to its consumer base.
The fashion rental segment is still in its nascent stage in India, and the country is taking its own baby steps. While there is no data to chart the growth nationally, there is a steady increase in the number of players and their growing client lists reflect that Indians are continuously inclining towards going for fashion on rent.
“In the years to come, occasion wear category for rentals will go big, where both men and women will prefer to rent than buy. We have the most demand from tier-I and -II cities. And now, our users have started demanding offline stores where they can visit and touch and feel the clothing before renting. I think in the long-term future, Indians will not only rent clothes for occasions but also for the everyday purposes like office days, weekend getaways or vacations, etc. Access will be the key and not ownership. As for Flyrobe, we are planning to expand throughout the country and later step into the international market as well,” concludes Aanchal Saini.
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