Retailers, let's face the challenges
of innovation together

18
nov
2019
Céline Delacharlerie
Correspondante Innovation Retail Asie
3 minutes
YCloset is a Chinese application offering a clothing and accessories rental service. It operates on a monthly subscription basis and relies on the local social rating system set up by the giant Alibaba, Sesame Credit, to offer some consumers a service without a guarantee. 

The concept

Bicycles, cars, but also umbrellas, or even basketballs. Almost anything can now be traded in China via an application: the sharing economy is exploding, reaching a value of 2,940 billion yuan (some 374 billion euros) in 2018.

How can this phenomenon be explained? On the one hand, by the development of mobile payment with the use of QR code to be scanned. On the other hand, by a very dynamic application ecosystem. A third factor is the advent of a new social rating system: Sesame Credit, which increases confidence, which is fundamental to the shared economy.

Currently in place in 43 Chinese cities, this system will be generalized throughout the country by 2020 and aims to quantify the reputation of each citizen; a good action in society is rewarded with advantages (e. g. : simplified procedure for obtaining a loan from the bank) when a bad action leads to public sanctions or even humiliations (e. g. : prohibition of taking the train or plane, posting of photos in public places). Since this score is visible to everyone, companies can then establish personalized offers based on the economic and social status of their customers.

New business models are thus emerging. As clothing consumption habits change quickly, the fashion industry is one of the front-line sectors: the rate of use of a garment, for example, has increased from an average of 200 to 65 uses in China in just 15 years. Such a transformation leads new players like YCloset to prosper.

Founded in 2015, the online platform based in Beijing operates in nearly 40 cities in China, including Shanghai, Guangzhou and Shenzhen. Unlike its European and American competitors, such as Rent the Runway, this service offers everyday clothing rather than ceremonial clothing and allows its users to rent unlimited items each month by choosing from a catalogue of over 500 brands. It also builds customer loyalty through its ease of delivery, the quality of cleaning and a more fluid user experience made possible by Sesame Credit: each customer with a score of 600 points – a person considered a good citizen – has their deposit requirement of 300 yuan lifted.

YCloset thus occupies a strategic position at the intersection of new retail models and the shared economy, a sector that is expected to reach 20% of China’s GDP by 2025 according to the National Statistics Institute.

Why use the application?

Renew your wardrobe continuously

With this clothing rental service, your dressing room takes a new dimension! Wear both classic and trendy outfits, whether for the work day, the weekend or for events. The possibilities are many and varied.

Winning in freedom

No more laundry chores, the laundry service is included with the service. Return the items and YCloset takes care of everything: the company has partnered with a leading dry cleaning company to ensure high quality cleaning of clothing. The items are also checked before each shipment to ensure optimal quality and cleanliness.

Benefit from a variety of important items

The platform claims to supply more than one million items of clothing and covers 500 brands, including entry-level luxury dresses, ready-to-wear brands and designer items. Delivery is also easy and fast: the user experience is smooth with an order placed in just a few clicks and delivered in less than a day.

 

Buy the clothes you like

If you particularly like an item, you can keep it and send the rest of the clothing box back. You will benefit from preferential rates on items as a YCloset customer. 30% of the brand’s turnover is now generated by purchases made by users of the service after renting items.

Belong to a community of e-shoppers

The platform has created a space dedicated to its community and allows users to interact, share fashion styles and earn rewards for future purchases.

 

Céline Delacharlerie
Correspondante Innovation Retail Asie
Celine is the correspondent of the Echangeur in China. On the lookout for retail innovations, she identifies and analyzes the latest retail and consumer trends in Asia.
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