Clothing Rental Specialist Tries on China for Size

U.S. fashion rental specialist Le Tote has tailored a plan to enter the competitive China market, aiming to stitch up a place among a booming — but crowded — field of shared-economy specialists.

Le Tote is currently testing a local service that lets users borrow clothing and accessories for a monthly fee, with plans to expand that to the general public this spring, according to a statement this week from its San Francisco base.

“To be the first U.S. subscription service in China, the largest e-commerce market in the world, is an opportunity that is both humbling and exhilarating,” said Le Tote Chief Executive Rakesh Tondon.

Le Tote named footwear and retail veteran Clement Tang as CEO of its China businesses, saying his experience would help the company in a market where rental clothing is still a relatively new concept.

“We can’t simply cut and paste the Le Tote experience,” said Tang. “The average per capita income in China is growing 10% year-over-year and 60% of disposable income is spent on fashion. The Chinese consumer is primed and ready for the future of retail, but has not yet had access to a solution like ours.”

China has embraced the shared economy concept in recent years, which has spawned companies like car-hailing firm Didi and bike-sharing startups Mobike and Ofo that have soaked up billions of dollars in investor cash. The concept has also inspired a wide range of more niche-oriented services renting out everything from umbrellas to basketballs and even sex dolls.

Against that backdrop, entrepreneurs have also bet on the apparel rental space that Le Tote is now taking aim at. A number of startups have launched in a range of areas, from names like MSParis offering mid- to high-end outfits, to Yi23, which offers more entry-level luxury and designer wear. Last year, MSParis and Yi23 raised at least $18 million and $50 million, respectively.

China Growth Capital, a major investor of MSParis, said in a report that a new generation of younger Chinese women prefer mid- to high-level brands, but can’t afford to buy such clothing and accessories within China. That offers opportunity for the fashion rental operators, the report said.

Contact reporter Coco Feng (renkefeng@caixin.com)