Here’s why furniture rental startups are exploding in India

Photo credit: C!.

When you look at the behavior of millennials, you see that they move around often.

Ownership is rapidly becoming a thing of the past, and customers are now demanding business models that fit the many different ways they interact with their products.

Companies like Airbnb and Uber provide access to things that last for fixed, short periods of time and can be shared. For disposable consumables, subscription models allow customers to maintain their dosage on a periodic basis. An example is the Dollar Shave Club, a startup that lets people set up a subscription to have razors delivered to their doorstep once a month.

Then comes the rental economy, a vast world that involves everything from secondhand clothes to pandas. The one thing that defines the realm of rental startups is that they involve things that can be used for a certain period of time for a cheaper cost than owning them (the pandas raise an ethical argument here). Then, these items can be returned to the owner, who will refurbish and put them back on the market.

While it’s easy to put all of these rental startups into one huge lump, each vertical demands its own specifications. A startup that rents clothes requires a certain type of warehousing, cleaning, and upkeep. Rental cars require vastly different storage units and maintenance.

“The market for rentals can be looked at like a scale,” explains Ajith Karimpana, CEO and founder of Furlenco. Furlenco is a furniture and appliance rental startup based out of Bangalore. “One end involves consumables like groceries and toothpaste, and the other end is things like airplanes, rockets, and houses. Things that are rented occupy the latter end of the scale. We’re trying to make furniture an option as one of these things.”

Photo credit: Lisa Risager.

Home furnishing in India is a huge market, with three out of the fifteen most heavily funded ecommerce startups in 2015 catering to the need. While all three of these work with the conventional segment of ownership, Ajith believes that buying things the conventional way will be less popular in the future.  “When you look at the behavior of millennials, you see that they move around often,” he explains. “Furniture is an interesting market because the value of a piece is rarely known. Even if you do want to go the extra mile and spend money, selling your used furniture will be difficult because it will essentially be a distressed buy. The value of furniture sinks the more you use it.”

And, to fit the mantra of disposability and constant flux that millenials have espoused, a piece of Furlenco furniture can be swapped for a new style at any time. “Let’s say you get a single bed with a television set attached to the foot of it,” says Ajith. “You’ll have to change that bed once you get a girlfriend. Or, even if you get bored of it. The rental model makes this possible.”

Different strokes

Photo credit: Ervins Strauhmanis.

While the rental world shares several qualities with the ecommerce world – inventory, logistics, payments – it comes with a slightly different tinge to it. Firstly, because returns are the norm for these startups, they require a different type of inventory.

Common ground