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Are Online Apparel Rental Startups Stirring Up a Storm Yet?


Saroj Javeri – PGPB Class of 2017

Gone are the days when you could aspire to rent only cars and homes with a few clicks on your laptop in India. Over the last 2 years, online rental marketplaces of all sorts have sprung up along with the e-commerce boom. Furniture, books, jewellery, accessories, apparel – You name it and you can rent it! Online rental sites are trending across the globe and had been conceptualised as early as 2004 with websites like Bag Borrow or Steal springing up in USA.

Currently, the fashion rental market in India, including western and ethnic wear is estimated to be worth USD 4-5 billion. In India, Flyrobe launched in 2015 and has brought the rental concept to the limelight with attractive campaigning, a quirky website and mobile app (with a user base of a hundred thousand a year).

Founded by 3 IIT graduates, the company has positioned itself in women’s ethnic wear, western wear and accessory categories (surprisingly only 580 odd garments are listed in each category). The rental charges range between 8% – 12% which make it lucrative for a shopper aspiring to wear an outfit costing INR 1 lakh on a special occasion. Competitors in this space include Blinge, Stage3, Liberent, Swishlist, the clothing rental & Secret Wardrobe. On the funding front, Flyrobe, Blinge and Stage 3 have received seed funding.

The business models of these startups centre around minimal inventory and collaborating with designers on a revenue sharing basis with the aim of a 100% return over the apparel’s lifecycle. Logistics (drop and reverse pickup) ideally contribute to around 40% of the costs per order.

The golden rule for any startup lies in addressing a problem, but do apparel rental startups in India address an existential problem? For the price conscious shopper, the unorganised retail sector in India fulfill most demand gaps followed by the emergence of the bridge to the luxury segment for aspirational shoppers. Not to forget, the seasonal sales across brick and mortar stores reduces the plausibility of a customer wanting to rent a garment online.

Despite factors like no deposits, delivery within 3 hours and easy reverse pickup and tie-ups with high-end designers, the road ahead for Flyrobe is a tough one. With rapid expansion of fast fashion international brands (H&M, Forever 21, Zara), heavily discounted options available on e-commerce majors, and conscious Indian customers shying away from wearing used garments (try envisioning an Indian bride wearing rented bridal wear), creating an apparel e-commerce rental roadmap in India is a daunting task.

On the sidelines is brewing yet another storm in the form of a marketplace for buying and selling ‘gently’ used items with players like Elanic Services, Exchange Room, Envoged & Spoyl trying to garner demand for this niche service.

This article is written by PGPB4 Student Saroj Javeri.

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