Covet a Ferrari? Dream of impressing your date with a flashy Rolex or the latest Balenciaga bag? As the global economy weakens, fewer Europeans can afford to buy such luxury goods. So they are renting them instead.
Short-term rental of all sorts of products (excluding real estate and holiday apartments) already represents an estimated €108 billion ($160 billion) annual market in Europe. And it looks poised to become a lot bigger.
A host of factors, including economic and environmental concerns, fast depreciation of goods, and a more transient workforce, means that consumers are increasingly searching for rentals online. But many suppliers can't afford to build sophisticated e-commerce and online marketing organizations, so prospective clients often struggle to find what they need.
That is where erento comes in. Some 8,000 European rental companies have elected to use erento, which is headquartered in Germany and rapidly expanding across the Continent, as a sales channel. The company's Web site acts as a one-stop shop for leasing everything from wedding dresses and Apple (AAPL) iPhones to karaoke machines and heavy construction equipment. It even offers dogs for rent, a service that's proving popular with men who think walking a canine might help them pick up women, and for working couples who find it difficult to look after a pet full-time.
In all, erento now lists more than one million items across 2,200 product categories and claims up to 50,000 visitors a day. "People are coming to the conclusion that it's more important to rent goods then to own them," says erento's co-founder and chief executive, Chris Mller. "It is a new way of dealing with investments."
"An eBay for Rentals"The company, privately funded by Mller and co-founder Uwe Kampschule when erento was launched in Germany in 2003, has since raised more than $2 million in venture capital. Investors include Germany's Holzbrinck Ventures, which has taken a 13% stake, and the Samwer Brothers, founders of online auctioneer Alando, which they sold to eBay (EBAY) in 1999 for $54 million.
The three Samwer brothers also were behind Jamba, a mobile content company they sold to VeriSign (VRSN) for $273 million in 2004. In 2006, the Samwers established a European Founders Fund with their own fortunes to support and fund early- and later-stage Internet businesses in Europe and the U.S. "We invested [in erento] because we liked the founder and thought of it as an eBay for rentals," says Marc Samwer. "We like marketplaces; it's what made eBay so successful."
The funding from Holzbrink and the Samwer brothers will help erento expand its existing service in Europe. The U.S., where online rental services are also growing, might be next. The U.S. has had online luxury-car rentals for some time. More recently, companies that rent out designer handbags, such as Bag, Borrow or Steal and From Bags to Riches, have started up in the U.S. A U.S. dog rental company called Flexpetz has been expanding in major U.S. cities and to London.
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