Over the years, online services gained tremendous popularity as internet penetration increased leading to more awareness. Today, from ride-hailing to food-delivery, an array of services are available at doorstep just within a few clicks on smartphones. In the last few years, renting needful items also became an emerging trend. With a young population leaving their hometowns and moving to cities for jobs, they often require furnishing items which are convenient to rent rather than purchasing. Moreover, they often change locations intra-city or inter-city depending on the job requirements which makes renting a convenient option. This can be seen among many families as well who often change locations for better opportunities. Here, we have captured some insights on how the market has grown in India.
1. Rental furniture or appliances is a Rs 33,500 crore market in India
Note: 1. TAM= Total Addressable Market; SAM= Serviceable Addressable Market; SOM = Serviceable Obtainable Market 2. HH=Number of Households
The total Rental furniture and appliances is a Rs 33,500 Cr market pan India. Some of the major players that dominate the market are RentoMojo, Furlenco, Rentickle and CityFurnish, both in terms of volume and value. According to our research, these players can serve a total relevant rented households of around 14 million with a monthly average order value of Rs 1,900. The average rental duration is usually for 13 months.
2.Top 20 cities contribute 55% which is Rs 18,200 crore
With 43% of India’s urban population, top 20 cities contribute 55% of the total addressable market. The market is expected to grow at a CAGR of 11% by 2025. The top 20 cities are the major driver for this market as it constitutes of a young working demographic.
3. Awareness for furniture & appliances is high; tier 1 cities to be the next big opportunity
Research shows that the awareness for renting furniture and appliances is higher compared to rental services across cities. This could be as a result of better marketing, word of mouth, positive reviews. Further, it has been seen that ~25 – 30% of the respondents are past product users.
Moreover, the market is poised to grow significantly as there is a strong amount of awareness and usage even in Tier 1 cities which shows definite potential, however, the bigger players are still not present in these markets. But as the pandemic induced reverse migration, bachelors, students have moved back to their hometowns to live with families and save on their expenses. This will create enough opportunities for these players for them to foray into these markets.
This space is still new compared to the other matured sectors. With convenience, competitive pricing and quality products, this market looks quite bullish in the times to come.