The Millennial Generation Is No Stranger To Luxury Leases. Will This Become A Trend In The Future?

The millennial generation who grew up under the environment of "shared economy" is no stranger to the leasing industry, and leasing luxury goods is also a reasonable choice for consumers nowadays.

This is also a hot topic in the 2030 retail forum of Women 's Wear Daily, held in New York in April 3rd. The luxury rental companies, Rebag and Rent the Runway, discuss how they should prepare for the future of leasing luxury goods.

When asked whether the two companies had expansion plans in China, they said they were still focused on gaining greater market share in the US.

Charles Gorra, the founder and chief executive of Rebag, said that China is the largest luxury supplier and the two largest product market, but counterfeit goods will continue to be their concern.

Rent the Runway's chief operating officer, Maureen Sullivan, who won Ma's investment last year to develop the Asian market, said that the company had already set up many focus groups, and found that many Chinese millennials were positive about the brand types currently provided on the platform, but she felt that the specific implementation of the product still needs to be resolved.

Have these two steamed up enterprises in the North American market missed the huge potential market in China?

Chinese consumers have bought nearly 1/3 of global luxury goods, but will their consumption enthusiasm turn to interest in leasing?

If consumers rent luxury goods, will they buy it?

Surprisingly, China's local fashion rental industry has many players.

Since 2014, companies such as Yi two or three, Xing Dong and Ms Paris have sprung up, and most of them are strongly supported by venture capital.

But they have not yet locked the market. Many consumers complain about false advertisements, delayed delivery or dirty clothes.

That being said, Chinese consumers are interested in leasing luxury goods, even those who are able to afford it.

According to star hole data, their rental population overlaps with luxury buyers.

Of the 10000 users, more than 40% of them are already heavy luxury buyers, and their luxury consumption exceeds 200 thousand yuan per year, of which 25% are white-collar workers with a monthly salary of 10 thousand to twenty thousand.

Like it or not, luxury leasing has become a global sport.

We conclude why luxury leasing resonates with the millennial generation of China for four reasons:

1. debt owners

Many reports show that even though many Chinese millennials are heavily indebted, they are still willing to spend money on luxury goods.

A survey by HSBC showed that the ratio of debt to income of the generation born in China in 1990 (1995 and 1995) reached an incredible 1850%.

Although being an only child, these people are financially assisted by their parents, but spending their money at such a speed may soon be exhausted.

Coupled with the slowdown in China's local economy, many luxury consumers may soon tighten their belts and learn to be more realistic.

Luxury leases will be a sensible choice for buyers with limited budget.

2. experiential consumption

Many of the consumers we interviewed used the word "experience" to describe their rental experience.

Lena Xu, 27, works in a creative institution in Beijing, emphasizing her experience of browsing hundreds of rental options online.

"I have a lot of choices at once," she said.

"Being able to change and enrich my wardrobe is a very powerful experience."

In fact, this massive selection is the most attractive for the first luxury rental user.

As chief operating officer of Rent the Runway, Maureen Sullivan described their services as "extension of customer Wardrobe". They can access the entire inventory of the company in the cloud.

The millennial generation likes to change their appearance many times without paying attention to the price tag, which makes them feel free.

3. self satisfaction

At a deeper level, the Chinese Millennial Generation's motivation to consume luxury goods is different from that of their predecessors: they avoid showing off their wealth, but luxury consumption is the way they achieve their goals. In fact, this attitude has changed the sense of "rent" in a way.

Sarah Liu works in a marketing and public relations company in Shanghai. She says she often needs to dress up to meet her customers. Leasing luxury bags is a cheaper option to meet these requirements.

She added that she would not spend money directly on luxury bags, but would prefer to consume high-end skin care products.

4. Green Generation

Leasing is not only beneficial to their economic conditions, but also related to making moral choices.

Fashion is one of the most wasteful industries nowadays. Millennials have begun to question whether they should solve environmental problems by buying new clothes continuously.

In the end, leasing luxury goods is another way of reusing fashion and enabling millennials to enjoy good feeling.