Dubai: Rent everything?
A handful of online marketplaces are trying to convince UAE consumers to rent what they need for a one-time, or temporary, use rather than buy. The portals’ hope is that they will be able do for pre-owned goods what Amazon and noon have been doing with new products and services.
Online sites selling pre-owned merchandise, especially fashion and accessories, have been doing quite well in the UAE in the recent past, with The Luxury Closet being the most prominent. Now, the likes of BorrowMe and Eze Lease want to take that a step forward and have their users think of products other than fashion items.
According to BorrowMe’s founder Nour Sabri , “Although high-end fashion rental is popular, we noticed a trend that people are looking for different items, (and) not necessarily high-end. These include baby products such as strollers, car seats, etc., as well as outdoor and camping gear. At BorrowMe.com, we can record and analyze search keywords to determine what products are in demand.
“There may be a slight inherent risk, but having a wide catalogue of goods will satisfy the needs of many. This approach reduces risk. BorrowMe is designed to be a platform for renting - and selling - ‘almost’ anything.”
The portal, which launched in August last year, sees fashion merchandise accounting for 20 per cent of its deals. The launch and operational costs were funded by Sabri, who put in $150,000. An angel investor then came on board with $50,000.
What BorrowMe does is aggregate the products and offers from multiple vendors in the secondhand goods trade. In effect, that makes it a ‘marketplace’ for anything that is pre-owned.
Are UAE consumers ready?
Questions are asked and doubts raised whether UAE consumers are ready to take to renting out goods. Especially when it means there will likely be multiple users for that product. Incidentally, the same scepticism accompanied the launches in the last decade when digital businesses such as The Luxury Closet launched. Then question then was whether UAE shoppers would be willing to ‘buy’ secondhand clothes and accessories.
That recent months have seen the launch of multiple platforms wanting to rent rather than sell products is probably the best answer that they can give. Fact is there is a base of residents in the UAE willing to rent if they find this suits their budget best.
“The demand for pre-owned goods is already well-established in the UAE, with one-in-five consumers using this method,” said Sandeep Ganediwalla, regional Partner at RedSeer Consulting. “For the majority of consumers it means getting a better bargain and owning luxury products at an affordable price. This has become even more important as many consumers have had higher than normal financial uncertainty.”
Renting is a popular mode of getting pre-owned products, especially in the fashion category with more than half of pre-owned fashion consumers renting than buying outright.
Rent a home – and rent furniture
The promoter of Eze Lease is into offering options on pre-owned furniture. ”Moving to a new country or home is not easy and can be expensive with a lot of first-hand expenses incurred on furniture and furnishings,” said Faisal Mushtaq, CEO.
Eze Lease lists beds from Dh40, and even has a package to fitout a studio apartment with products starting from Dh499. For Mushtaq, it is about helping customers with their everyday needs and making it “like leasing a car or getting a subscription to a streaming service”.
Eze Lease already has a private equity partner in Greenfield Advisory Singapore. The platform also creates opportunities for landlords, asset management companies and broking firms by “exploiting the rental gap between an unfurnished property vis-a-vis a furnished one”.
As 'fast furniture' accrues in landfills with people moving from property to property, it is advisable to simply rent products like beds, sofa and kitchen appliances.
The customer can subscribe to using the furniture for a minimum of six months to “as long as it serves the needs of the end-user”. The product once it is returned goes through a refurb, cleaning and sanitizing cycle as per hygiene protocols and then put out again on the platform until it outlives its asset life.
From selling to renting
Will portals focussed on renting out be the big trend to watch out for in UAE’s online space? Last year was all about ‘buy now pay later’ fintech companies, where they allowed shoppers to buy on monthly instalments spread over months and not worry about paying interest rates.
Ziina eliminates the need for IBAN and swift code fields, and also makes the payment experience social with GIFs, photos, text and emojis. To date, the company has raised $9.4 million from investors including Avenir Growth, Goodwater Capital, ANIM, the Oman Tech Fund, Class 5 Global, Long Journey Ventures, Graph Ventures, Jabbar Internet Group, Wamda, and FJ Labs - as well as the early employees and executives at PayPal, Stripe, Revolut, Venmo, Brex, Checkout.com, Notion, Block, Airbnb and Deel.
It holds an Innovation Testing Licence in the Money Services category from the Dubai Financial Services Authority and will release its new app to a limited number of users as part of its initial release.
According to Sabri, “There are pre-owned merchandise selling portals in the UAE - but not many offering rentals. In the UAE, some online companies provide specific categories of items such as healthcare, events, parties, camping, etc.”
Those choices could soon widen further. As for buying or renting, that remains the UAE consumers’ choice.
Znap aims to help local businesses retain consumers for longer terms and “eventually transform them into loyal buyers with features such as Znapay (with the option of cash back or discount ) and credits vouchers. Some of the 300 plus brands listed with ZNAP include Just vegan, ILA, Flying Cup Experience, Orientale NARA Pan Asia and Herz Salon. The founder is Uday Rathod.