(Yicai Global) June 29 -- Customer-to-customer marketplaces for renting luxury fashion apparel have become the latest chapter in China's sharing-economy chronicle, offering designer handbags for as little as CNY60 (USD90) for a five-day lease.
Tina, a bank clerk, tried out a Balenciaga motorcycle bag through a luxury goods sharing application that was recommended by friends. In stores, the product has a price tag of CNY9,000 but the app offered to send the bag to her home and back after five days of use for CNY60, including a discount.
Tina had to pay a deposit of CNY6,000 for the lease, but the platform promised to return the deposit immediately after the bag was sent back on schedule. Some platforms have also begun to support the use of personal credit systems such as Ant Financial's Zhima Credit in order to skip the deposits.
The C2C luxury rental market is growing with players such as Xinshang and Secoo. Xinshang obtained USD50 million in Series C- round of financing co-led by venture capital firms GGV Capital, Joy Capital and Northern Light Venture Capital in January. Secoo went public on Nasdaq last September, raising USD111 million by offering 8.5 million shares.
New sharing economy-inspired business models, including B2C, C2C, and WeChat, have emerged in the mid to high-end consumer market, which is attractive to investors, GGV Capital's Manager Tang Chuanye told Yicai Global.
Chinese consumers contribute about one-third of revenue to the global luxury goods sales market, a report jointly released by Bain & Co. and Italian luxury brand committee Altagamma states. The report predicted that this year, the sales income will increase by 20 percentage points to 22 percent from last year in China's mainland, showing higher growth than in any other country. Bain also estimated that online sales of personal luxury goods will make up one-quarter of the market by 2025.
To prevent fake products, the rental platforms have strict identification systems, but the Chinese online luxury market still lacks governmental certificates such as in Japan.
The sharing model has gained critics too. Luxury goods, from handbags to jewelry, are valuables that people purchase out of impulse or desire, representing a symbol of status, an insider source from a well-known Italian upscale brand told Yicai Global. "Consumers want to own these goods, rather than use them temporarily."
For some, before owning, the sharing economy offers the flexibility of trying out. After returning the Balenciaga handbag, Tina said she might purchase her own one day.