A few years ago when Vineet Chawla went to Kenya, he wanted to rent a DSLR for photography during his holiday. He was unable to procure one on rent and ended up spending ₹1 lakh on buying a Canon. So, when he set up Rentickle, the company that offers furniture and consumer goods on rent, Chawla decided to include cameras in it as well. Rentickle is today among the top five-six rental companies, which offer a range of products on rent to youngsters, who are not keen to invest in buying them. These include furniture such as beds, sofas, dining sets, tables, as well as consumer durables and appliances, including refrigerators, washing machines, air coolers and microwave ovens.
Rentickle is just one among such companies (there’s Fabrento, Furlenco and RentoMojo, among others) that are mushrooming to cater to the needs of young consumers. Rentickle’s Chawla says that it is a booming business, with a handful of strong brands already serving the market. “Consumer awareness about this business is still low and the upside is huge,” he says.
Currently, a majority of Rentickle’s clients are young IT professionals in places such as Gurugram, Delhi, Hyderabad and Bengaluru. Chawla’s target consumer is between 22 and 30 years. He/she is typically someone who is moving cities for work. The company also counts newly married couples among its customers.
Sidhant Lamba, founder of Fabrento, another Delhi-based company in a similar business, agrees: it is the young that are driving this business. The company has a presence in Delhi, Faridabad, Gurugram, Mumbai, Thane, Chandigarh and Mohali. Fabrento is part of the Continental Group, which has been making furniture for the past 50 years.
Clearly, the furniture rental companies are catering to millennials. According to Pew Research, millennials are the people born between 1981 and 1996 (aged 22 to 37 in 2018). Increasingly, marketers are looking for ideas that cater to their needs. An earlier Morgan Stanley report (April 2017) said India will have 410 million millennials, who will spend $330 billion annually, by 2020. That’s more than the population of the US, and more than the number of millennials (400 million) that China has today, said a Mint report.
Fabrento and Rentickle promoters describe their consumer as typically someone who comes to the big city to work. These people do not know how long they will stick to their job. So, they do not want to get stuck with furniture and other stuff as they may be mobile. Interestingly, another report says millennials have a tendency to quit their jobs within two years of joining. In fact, a lot of them also prefer to be part of the gig economy rather than getting stuck with a 9-5 routine. “I am 28. I don’t know whether I will settle in Delhi, Pune or Chicago. This is how the millennials think,” says Chawla.
So they’re getting beds and living room furniture and are happy to pay the monthly rent. Lamba’s average ticket price is between ₹1,600 and ₹2,500 a month, which these youngsters find easy to shell out.
The renting companies say the arrangement suits the youngsters “because when they feel they cannot pay, they merely cancel the subscription. It is not like they are defaulting on an EMI”, explains Lamba.
Marketing experts say the term “millennial” is not an age group, it is a state of mind. And Chawla understands this. “Millennials are clear on what they want. As consumers, they are very smart. They do not want an asset-heavy life.” In an earlier interview to Mint, a 26-year-old woman had admitted that she was in no hurry to buy a house and was sharing a flat with a friend. She had no intention to buy a car either as she was happy to use Ola and Uber to travel. Says Fabrento’s Lamba: “We are living in the times of a shared economy. The times to hoard are over.” Millennials do not want to buy real estate or automobiles as they do not want to get stuck with things. Besides, they may move frequently between cities. They do not want to be tied down to a location.
With changing consumer habits, both Rentickle and Fabrento see a big potential in the renting business. While Rentickle is eyeing Kolkata, Mohali, Kochi and Jaipur in the future, Fabrento is gearing up to launch in Bengaluru. “The millennials’ mindset is to spend on entertainment, gadgets, travel and experiences rather than on assets. They are value-for-money conscious but not tied to assets,” says Chawla.
Shuchi Bansal is Mint’s media, marketing and advertising editor. Ordinary Post will look at pressing issues related to all three. Or just fun stuff.