In China, the sharing economy stretches to fashion as millennials seek way around shortage of quality affordable designs
Apps such as home-grown YCloset and MSParis, and US-based Le Tote, tap demand from young professionals for affordable luxury rentals and from college-age fast-fashion fans without the income to constantly update looks
The growth in China’s e-commerce industry means there is an ever-expanding variety of designer brands just a click away for even the most discerning fashion fan. Yet there is an emerging group of women seeking more temporary style solutions, and they are turning to the sharing economy for answers.
It used to be that sharing apps for clothing in China were reserved for those special occasions that called for a designer gown and a handbag to match. Women who couldn’t afford full-time ownership of luxury evening dresses, or for whom it wasn’t it feasible to spend heavily on an item they would wear only once subscribed to services inspired by US online fashion rental service Rent the Runway.
But with only so many occasions to dress like a red-carpet celebrity, a new gap has emerged in the market, for basics.
“That’s what is really needed in China,” says Doris Ke, marketing and PR director for YCloset, a clothing sharing start-up. “You don’t really have a culture of having so many parties or gatherings compared to the US; in China, it’s more about everyday wear.”
Chinese clothing rental platforms such as YCloset and MSParis and, most recently, US-based Le Tote are racing to meet this demand from China’s aspiring middle class for everyday wear. The consumers targeted by these companies, mostly white-collar millennial women, want to update their look and add variety to their wardrobe at a lower cost and with less risk than buying items in a store.
One of the factors fuelling interest in sharing clothes as opposed to buying them is availability, Ke says. “It’s very hard to shop for clothes in China. You either see a lot of expensive clothing – top-tier luxury you can’t afford – or it’s low-quality clothes that you buy online, and you can’t usually find out if the quality is good or the size is right until you receive the product.
“It’s really hard for women to find quality, affordable design in China, so that’s a big problem.”
Last autumn, YCloset raised US$50 million in a funding round led by Alibaba, Softbank China and Sequoia China, giving it a leg-up as it cooperates with China’s leading e-tailers, Taobao and Tmall, both operated by Alibaba (the owner of the South China Morning Post).
YCloset has more than a million items in stock, in categories ranging from outerwear to evening wear, accessories and jewellery. They are sourced from accessible luxury and streetwear brands and emerging Chinese labels; these include Prada, Miu Miu, Kenzo, Acne Studios, Topshop, and China’s Masha Ma.
Customers who buy a monthly subscription can try out as many items they want, and are guaranteed to receive professionally cleaned pieces. Subscribers also gain access to a digital network in which they share style posts of the items they wear, which serve as inspiration for other users of the app.
Most of YCloset’s users are concentrated in first-tier cities since, despite China’s burgeoning sharing economy, the concept of wearing clothes other people have already worn is fairly new.
“A lot of people have concerns about whether it’s clean and whether they can trust the platform,” Ke says. “But many people in first-tier cities have higher education and they’re usually learning what’s happening abroad, so they’re more accepting of sharing clothes than people in second- and third-tier cities.”
Le Tote chief executive Rakesh Tondon says cleanliness and trust were among the primary concerns raised when it did market research in China. This month, Le Tote announced a partnership with Clement Tang, former executive director of shoe retailing giant Belle International. This, said Le Tote, made it “the first US subscription service in China, the largest e-commerce market in the world”.
Currently in its initial testing stage, the service is available only through the WeChat social media app; however, the San Francisco-based company will launch its own mobile platform in China this spring. Tondon is hoping to tap a similar market to YCloset.
“This is more of a data and a logistics business than a fashion business,” Tondon says. “We built our own technology to do literally everything from end to end, and ultimately, applying that data and knowledge in different markets is very similar.”
Meanwhile, other local players have steadily improved their services to meet market demand. Shanghai-based MSParis, which started out focusing only on gowns and luxury, has recently tapped into the market for everyday wear. It offers two tiers of service, one for “light luxury” and one for “basic” service.
The basic subscription is aimed at college-age customers with low disposable incomes, and mainly offers fast-fashion brands; the light luxury service is targeted at a slightly older demographic who need stylish clothes to wear to the office.
MSParis founder Xu Baizi says that, while incomes in China are on the rise, affordability remains a major driver of traffic to clothing sharing apps.
“Many professional women in first-tier cities are just starting out on buying ‘light luxury’, because high-luxury products cost somewhere between 20 to 30 per cent of their monthly salary,” Xu says.
“They still mainly purchase fast-fashion pieces, so our service is actually for these aspiring consumers.”
Xu says the rise of fast fashion in China has drastically altered the consumption habits of younger MSParis subscribers, spawning a generation of shoppers with a desire to constantly change their wardrobe to keep up with current style trends.
“The cost for them to own a piece of clothing has become higher and higher, as they don’t wear it as many times as before,” she says.
The rise of social media has also fuelled a desire for variety. “If you go through a girl’s WeChat Moments, you rarely see her in the same outfit,” Xu says.
China’s clothing rental services are a boon for fashion brands, as they give consumers a chance to familiarise themselves with collections and labels they wouldn’t necessarily bother trying out through shopping online alone.
“It’s almost like a relationship. In the past, you could only ‘get married’ to an item of clothing; now you can have a date with a dress and see if it fits you,” says Ke. “You can practically go on dates with a million dresses before you find the one that really fits.”