Coping with covid: the re-commerce industry

Shilpa Bhatia, founder of The Clothing Rental, an online high-fashion rental platform, is worried. “In the past, people might have had a mental block about wearing something that somebody else has worn but now there’s a sense of paranoia because of the (corona) virus and the media we are consuming. I don’t know how people will react to things once the lockdown is lifted," says Bhatia.

Her fears are not misplaced. Most retail businesses have come to a grinding halt, social events have been cancelled and travel postponed. It’s tough for all retail businesses but perhaps particularly so for the apparel industry’s re-commerce, or resale and rental, brands. Going by prevalent advice, such as that shared by the US Centers for Disease Control and Prevention (CDC), “current evidence suggests that SARS-CoV-2 may remain viable for hours to days on surfaces made from a variety of materials."

Despite the fact that garments are properly processed before being put up for rent on these platforms, most customers will perhaps continue to feel an “ick" factor owing to the pandemic, even after current restrictions on e-commerce are lifted.

According to market research and advisory company Allied Market Research’s 2017 report, Online Clothing Rental Market—Global Opportunity Analysis And Industry Forecast, the global online market for rental clothing was estimated to reach $1,856 million (around ₹14,000 crore now) by 2023, growing at a CAGR of 10.6% from 2017-23. Online consignment and thrift store ThredUP’s 2019 resale report suggested the total second-hand apparel market would double by 2023, from $24 billion to $51 billion.

Now, all bets are off for an industry that is still young in India. “The rental business in India has been around for decades but in an unorganized ‘mom-and-pop’ shop manner," says Aanchal Saini, CEO of fashion rental service Flyrobe and co-founder of RENT IT BAE; the companies have merged. Organized resale and rental businesses build the bulk of their inventories from brand consignments, be it fast-fashion players or designer labels.

These consignments include clothes and accessories ranging from formal and casual wear to ethnic occasion-wear. Resale and rental orders are taken both online and through stores. Pricing varies, depending on the item’s brand of origin (the higher the brand value, the higher its depreciated price), condition and the time it’s rented for.

Some orders are still being placed on online re-commerce sites. VRTT Vintage, an online luxury resale store, for instance, specializes in reselling clothes and accessories from international luxury brands. “From a sales standpoint, customers are still placing their orders with us because these products are one-of-a-kind, and they want to buy pre-owned products rather than new ones. Also, with travelling being restricted for the foreseeable future, I personally feel that customers are more inclined towards supporting local, small brands such as ours," says VRTT Vintage’s co-founder, Diva Dhawan. One more reason could be that people are spending more time indoors, in front of their screens.

But re-commerce platforms such as Rewear, Flyrobe, RENT IT BAE, The Clothing Rental and VRTT Vintage are obviously unable to add to inventories or make deliveries—their websites and social media handles carry notices of indefinite delays.

Vikram Ramchandani, founder of Rewear, is worried about staying relevant and contemporary over the short term. “We rely on incoming garments from women’s wardrobes. Because we can’t service that aspect, the catalogue has remained static. That has resulted in concerns about the company looking stale over time."

Moreover, brands are worried about how customers will react to used (pre-owned/second-hand) clothes in a post-lockdown world. “It’s (already) a crisis time for rental businesses as all occasions and events have been cancelled," says Saini. Events and occasions, especially weddings, figure prominently on the calendar for clothing rental services.

Apart from business-to-consumer models, re-commerce brands also offer customer-to-customer models, so consumers can earn money by renting out their wardrobe. In India, Flyrobe started operations with this model.

There are fears now that consumers may hesitate to subscribe to such a model, given that these clothes aren’t owned by the brand. Yet resale and rental brands are particular about the clothes they offer. They are efficient in their sanitation and laundering processes, and transparent about it.

Flyrobe launders clothes and then sanitizes them again before placing them in their inventory. Saini says “that takes care of any viruses". Rewear has tied up with Bueno, a premium dry-cleaning service. All the garments return wrapped in safe plastic bags. “After the clothing has been dispatched, it almost hasn’t been touched. Our clients are usually the first ones to do that after dry-cleaning," says Ramchandani. That was the practice even before the pandemic.

In fact, trying on new garments in retail stores could be potentially more problematic. “At the store, an average of 17 people have tried any piece of clothing before you. That’s when hygiene becomes questionable," says Saini.

She is hopeful that business will pick up once the lockdown ends and the wedding season begins. “The crisis is already having a major toll on the economy and coming out of this people might not want to spend too much money. The rental and resale business models will see growth," she says.

It may be time, she believes, to try out the kind of rental subscription models offered by international companies such as Rent the Runway and Armoire—a more flexible wardrobe with a greater variety of clothing for a longer time period that could help Indian businesses cater to a broader market than events and occasions.