Peer-to-peer businesses – more commonly known as collaborative consumption or share economy – is growing and covering different products and services. While the idea is slowly catching up in India, globally collaborative consumption has been around for close to a decade now. According to Rachel Botsman, who has written a book and several articles on the subject, the peer-to-peer market is close to over USD 26 billion dollars, leading many to believe that the model is big enough to be disruptive.
A new player entering the market is RentSher, an online renting platform with home delivery and pickup services. It was launched in 2014, before Christmas with the idea to promote the renting of decorations and costumes rather than buying them upfront. The team claims that RentSher is a transparent, easy-to-use service that offers online rentals for anything, is scalable as a marketplace, and enables social sharing and promotions. With mass consumerism picking up in India, the team believes that people are bound to have spare products to share, rent or sell.
Several global companies are entering the market, and there are startups working in categories like fashion, cars, and books. The other names in the peer-to-peer space are Faida, Rentogo, and irentshare. However, Anubha Verma, one of the Founders of RentSher, says: “The others are in the community and B2C space, and they don’t actually complete the loop in terms of product ordering, delivery and other value added services.”
An effort against mindless consumerism – Ketaki, Founder RentSher
One of the key things that inspired the team was a need for a sustainable way of living. According to Ketaki, one of the Founders of RentSher, the manufacturing of every kg of technology product leaves behind on an average 3700 kg of waste material, which in turn harms the environment. She adds: “Most of the gadgets we use have a skewed ratio of waste production and are the highest producers of land or even sea debris fills. Products like mobile phones, laptops and televisions generate huge amounts of toxic and non-biodegradable waste.”
The idea came to Ketaki and Abhijit when they became new parents. They were looking for different economical and environment friendly ways to raise their son. So they decided to rent things like toys, accessories and gadgets that were sparingly used. Soon the couple realised that this was not just true for items for new born babies but also for things like household appliances, power tools, travel accessories, and sports gear.
“We thought these things are better rented than bought, and not just for economical reasons,” adds Ketaki. Soon Anubha and Harsh joined the team and RentSher was born. The team put aside USD 40,000 to kick start the venture and today they have a wide repertoire of products on their website.
Market and Traction
The team says that the website gets over 100 visits in a day, and so far have rented out over 300 products. RentSher is currently operational in Bengaluru and they plan to expand to Pune, Chandigarh and Gurgaon soon.
Following a P2P rental model, presently, RentSher does not charge its customers for the listing, however a payment gateway and delivery services are provided. They charge 20 per cent of the rental value from the owner or product vendor for every successful transaction.
“We seeded the market with our own products to give an idea as to what can be rented; and that has been very useful. People walk up to us and say, we also have an extra stroller or a bunch of novels to rent. Our inventory details also answers many basic questions like how much rent to charge,” says Anubha.
Based on the market estimate done in Bengaluru, the team estimates a 20 to 30 per cent of acceptance on the rental model, which converts the market size close to USD 120 million, with a revenue potential of USD 25 million. “With 7-10 metros and around 12 tier II cities, the total market size could be approximately USD 400 to 500 million annually. This is similar to the top-down market size based on e-commerce growth in spare products,” says Harsh.
The team believes that of the burgeoning online retail industry, a significant portion of the goods bought will be rented out in next one to three years. They add that, of the USD 500 billion Indian retail, even if five per cent is available post use with 10 per cent rental value and 20 per cent commission; the market size is USD 500 million.
RentSher plans to expand to five cities by the end of 2015. They also plan to add more differentiating features on the platform on the basis of customer feedback. “This could also involve easy mobile apps for renting and uploading products. And we need to raise investment for our expansion plans,” concludes Anubha.
- peer to peer
- peer-to-peer renting
- Rachel Botsman
- Collaborative consumption
- Shared economy