In uncertain times, sharing rather than owning makes for a compelling proposition. Why buy a house or a car, or furniture or home appliances, or even classy clothes when you can rent them?
The idea also fits into a millennial’s way of life — spend more on experiences, like travel, rather than be tied down with mounting debt one has to repay.
Rajat Arora, 23, who is relocating from the US to the India office of his financial services company, plans to go lite — much like his new office at a coworking facility in Pune. “I don’t want to buy anything, but rent it — furniture, apartment, car and even an umbrella when it rains.” The reason for renting stuff is that he is not sure how long he will be with the current employer. He is also not too optimistic about the overall job market.
Even small companies, it appears, are not ready to sink in money, given that even startups are into sharing through business-to-business arrangements.
NestAway, a residence rental company, frequently partners with other startups such as furniture rental ventures Furlenco and City Furnish to equip apartments for sharing with sofas, beds, almirahs, appliances and so on.
This win-win situation, where there is ready and growing demand, has attracted a host of companies whose business model is to rent rather than sell. And this business is exploding amid an economic gloom. Consultancy EY sees the size of the Indian sharing economy to becoming nearly $20 billion in five years.
Sharing Scales Up
Stage3, a fashionwear rentier funded by Blume Ventures, claims to have seen a six-fold increase in user base between October 2018 and 2019. The startup lets you rent clothes or wedding outfits by designers such as Sabyasachi Mukherjee, Rina Dhaka, Anju Modi or Manish Malhotra at one-tenth of the MRP. NestAway too says it has 75,000 tenants in 35,000 homes. The startup has so far raised $125 million from multiple investors, including Flipkart, Tiger Global, Ratan Tata and Goldman Sachs.
“This generation is consuming more and owning less,” says Karan Jain, cofounder of Revv, a car rental platform.
While Uber and Ola cater to point-to-point commute, startups like Revv see an opportunity in a longer engagement. There are around 4,000 cars on its platform and these are rented out — for hours, days, weeks, months or even years.
“There are people who want new car models every two years without the hassle of paperwork or owning an asset. We help them,” says Anupam Agarwal, the other Revv cofounder.
Neetish Sarda, founder of SmartWorks, says 25-30% of the office space in India is under the coworking model or is shared.
He sees office space under coworking scale from 20 million square feet as of today to 100 million square feet in the next five years. About five years back, co-working space was just under 10 million sq feet in India.
“Drivers for growth of coworking include low costs, plug-and-play environment and hassle-free operations,” says Sarda.
Nothing Permanent
In some ways, sharing is not new — paying guest accommodations or PGs have been around for much longer. Yet PGs could never scale beyond local areas, usually around campuses.
What changed the sharing business were mobile apps that made assets more accessible and some clever innovation to solve real problems.
The trend started with cabs and has expanded to renting different kinds of assets, including home appliances, bikes and dresses. And now the businesses are scaling.
Of course, the gig economy is also contributing its bit to the expansion of the sharing economy.
“There are no permanent jobs. Why should I lock myself into permanent assets, which will be expensive to maintain, and I won’t probably use them for their entire lifecycle?” asks Pankaj Jain, 24, who left his job at an online marketplace to do a course in finance. “There are options to meet any asset need and I don’t want to be in a situation like my parents who spent years paying off loans and had to sacrifice holidays.”
Global companies are seeing the market expand in India- with millennials driving the trend. For instance, Airbnb offers 54,000 properties across 100 cities in India. By offering unused space for sharing, the platform says home owners collected $28 million and welcomed 800,000 guests in 2018.
“We are just scratching the surface,” says Amanpreet Bajaj, country manager, Airbnb India.
via The sharing and renting economy sees a bloom amidst the slowdown – The Economic Times
aniltikotekar4sme.com 