We live in an era, where nothing is permanent. Our fast-paced lives have the ability to evolve on a day-to-day basis, or rather an hourly basis as well. So, the question is- when everything can be changed, replaced and exchanged- why buy when you can rent?
At the Tiecon Delhi 2017, Ankit Mishra (StoryXpress), Geetansh Bamania (Rentomojo) , Sakshi Vij (Myles) and Shreya Mishra (Flyrobe) came together to discuss why most of the millennials or the generation of today prefer renting as compared to their parents who preferred buying.
The process of renting has been, for the most part, fragmented. Today, we see a more structured form of the renting business which includes everything from clothes and accessories to even sharing of financial resources. A concept which is now referred to as the rental or shared economy. The rental economy is booming across the world with about 25-30 billion dollars invested in this business earlier this year. In a first world country like the USA, 160 million people are part of this economy out of which 70% have chosen to be there not forced. On the other hand, India is not too behind with the same trends being recorded here as well.
The idea of a sharing economy is simple. If there is an asset that a consumer buys but doesn’t fully use then that can be disrupted by renting. Examples like clothing items and vehicles are commodities that can be disrupted by renting. According to trend reports, after mobility which is cars and bike rentals, the second largest category is fashion rental. Half a billion dollars have been invested in this category. The idea is to build an alternative lending class.
But, the question is why you would spend the same money on renting which you would have otherwise spent on buying? The answer is simple- frictionless services and products that are more economical, practical and efficient. But, it’s not just about affordability, it’s the only choice most of the millennials have due to their lifestyle of being constantly on the move. The reason being, only a fraction of India’s population, has the capital to participate in retail. So, somebody has to give them the capital to even participate in the retail. One needs the lending aspect but not without the flexibility, and that’s what leasing provides. Renting businesses today are building a consumer leasing place for an entire product category, in other words, they’re providing a flexible lending solution.
So, what sort of future do these businesses hold for the rental economy? According to PricewaterhouseCoopers, the sharing economy will generate potential revenue of $335 billion by 2025 globally. The way people are already adapting to sharing economies like Airbnb, they’ll slowly become open to the idea of renting clothes as well. Renting adds productivity to the economy. It’s a more efficient way of doing things. In fact, all customer behaviours and markets converge into the most convenient, tactical and most efficient solution, renting. When renting holds a massive scope to open access to people and not just share, then why wouldn’t they choose renting?