Last December, Delhi-based Kritika Verma moved to Bangalore to work with a travel company. Soon, the 23-year-old took a house on rent and was searching for some basic furniture - a bed, shelf and a small side table. Verma did not want to buy them all as she was expecting to return to Delhi soon. It was then a friend suggested that she should try renting furniture online. With some hesitation, Verma hit the internet and stumbled upon Furlenco, a furniture rental portal. "I paid Rs 1,300 as a months rent and hired the furniture I wanted," says Verma. "It would have cost me more than Rs 18,000 if I had bought the same." The process of 'renting' was also much simpler, she says. "I saved time, money and lots of energy."
Verma is not alone. Thousands of such young customers are now using tech-enabled renting and sharing services to hire an array of products - furniture, consumer appliances, designer wear, baby products, art pieces and even farm equipment. The online renting and sharing market is set to change the way we consume goods and services. The global sharing economy was worth $3.5 billion in 2012 and, growing at around 140 per cent CAGR, the industry touched $115 billion in 2016, according to Guru Malladi, Partner at EY, Strategy, Innovation and Digital. It is projected to reach $250 billion by 2020. "Though highly fragmented, India forms around 10 per cent of this," he says. A PricewaterhouseCoopers report shows that the rental market will touch $335 billion by 2025 globally.
The segment sees brisk action today. Market researcher AMR notes that the online clothing rental market, which forms a significant chunk of the total retail renting pie, is expected to grow to $1.8 billion by end 2023 from the current $1 billion. Forrester Research estimates that in India online retailing of furniture and homeware touched $1.1 billion in revenues in 2017, from $900 million in 2016, growing at about 36 per cent year-on-year. The rental market makes up only a small pie of the overall sharing economy.
"Thanks to the easy access enabled by technology and the fact that more youngsters now want to remain asset-light, the renting and sharing economy is here to stay," says Malladi. A bunch of start-ups have already come up - furniture, consumer appliances and apparels are the most popular categories - and the sector is on a tear, growing at more than 100 per cent annually.