As a practice, clothing rental has been popular among people for a fairly long time now and its popularity does not seem to diminish any time soon. Clothing rental gives people freedom to wear what they want to wear without actually owning a piece of clothing. The traditional approach to staying in line with current fashion trends involves selecting a piece of clothing, which seems good to an individual, and buying it by paying upfront the price of that clothing. Although this method is still very popular across the globe and accounts for a major chunk of the global clothing sales, it has a downside to it. Premium brands often price their clothing at a price which does not fit well into the budget of a fairly large share of global customer base. Although such brands continue to lay a major share of their focus on a specific income group, they often fail to attract customers from other income groups.
On another front, people buying clothes often end up owning a piece or multiple pieces of clothing which they do not see themselves, or the person they’re intended to be worn by, wearing for long enough either because of changes in people’s physique or because the clothes lose their charm on being worn a couple of times. Some pieces of clothing, which are meant to be worn only on some special occasions, often land in closets after being worn only a couple of times, and stay there until they are discarded after some time. These downsides to this conventional approach have been pushing many people to look for alternative ways of staying in trend. Clothing rental is known to unhook people from these risks and offer them freedom to pay for what they want to wear and till they want to wear. This has been increasing its popularity across the globe, and this trend is expected to continue over the medium and long term.
Online clothing rental is an improvement to the conventional clothing rental practice as it adds another layer of convenience to it. People can browse through a wide array of clothing options being made available to them by various brands, and rent the desired designs whenever and wherever they want. The trend is being partially fuelled by increasing penetration of internet across the globe. The figure given below shows the increase in penetration of internet into all regions worldwide:
Global Internet Penetration, % of Population
Source: The World Bank Group
Increasing penetration of internet across the globe is opening doors to immense growth opportunities for various industrial sectors in many new markets. As the number of people having access to the internet continues to increase, the number of uses of internet are also witnessing a continuous increase. Rapid growth of e-commerce worldwide and its increasing contribution to the global GDP explains how internet penetration is adding momentum to the growth of global retail industry. The size and growth of the global e-commerce industry can be estimated by looking at the inflow of investments into many of its sectors. The figure given below shows the flow of investments into e-commerce analytics across the globe:
Global E-Commerce Analytics Market, in US$ Billion
Source: Knowledge Sourcing Intelligence Estimates
As impressive as the growth of this market seems, the global e-commerce sector is also showing a very robust growth. For the online clothing rental market players, this offers them required infrastructure to drive their business growth. The market growth is also being driven by continuous expansion in global middle class population with improving disposable income. Net National Income has, for long, been seen as a fairly reliable indicator for standard of living of people. Improving global net national income per capita means points towards improving standard of living of people. Although inflation also plays a key role in determining the disposable income or spending capacity of people, Net National Income can give a good idea of the trend. According to a data from the World Bank Group, adjusted Net National Income per capita stood at $4,487.474 (in current US$) in the first year of the century i.e. year 2001. This number has been showing a good growth since then and it is evident from where it stood in the year 2018. According to the data, the adjusted net national income per capita, over this period, increased by around 106% as it stood at $9,254.894 (current US$) in 2018. As people are witnessing an improvement in their standard of living, the desire to look stylish can also be seen strengthening its roots. Since renting clothes is easy, affordable and cost-efficient, people are gradually moving towards it. This, coupled with increasing number of hours people spend on internet, is driving the growth of online clothing rental market.
Geographically, the online clothing rental market can be segmented into North America, South America, Europe, Middle East and Africa, and Asia Pacific. North America and Europe together account for a dominant share in this market and the market growth in these regions is majorly attributed to high disposable income of people in countries like the United States, the United Kingdom, Canada, and France among others. Furthermore, presence of a good number of market players in these regions, which offer tailored packages for diverse needs of people, is also fuelling the market growth. Rent the Runway, for instance, offers multiple plans with exciting features to attract people of different income groups to its platform. Asia Pacific remains a lucrative market for many market players and the regional market is witnessing a continuous inflow of investments by them.
About the Author:
Dhiraj Kumar Sharma is a Market Research Analyst at Knowledge Sourcing Intelligence. He combines his outright understanding of technologies with years of experience working in the industry to deliver actionable information to clients who span across industries and geographies. Dhiraj often works closely with clients in order to better understand their requirements and is known for the quality of market insights he delivers to them.