Name: Redressing the multibillion-dollar fashion rental industry | CNBC Make It
Uploaded: 2021-08-12T19:45:25.000Z
Duration: 8 min 40 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

Adverbs of degree

being a husband and wife team definitely have some really good advantages.

So for us for example, makes you work longer hours, the high street is not what it was and one singaporean couple is taking full advantage.

He was Charles is ah this is really analytical raise a lot more focused on branding side operational side of things.

We'll have a balance when chris hallum and rain a limb saw an opportunity to redress sustainability issues in the fashion industry, they wanted to do so in style, this problem affects me personally, so I was very motivated to solve it and the duo behind clothes rental app style theory certainly don't do things by halves.

I mean honestly we don't know whether we are like foolish or brave.

Yeah, Style theory is a singaporean fashion rental platform which allows subscribers to loan unlimited items for a flat monthly fee.

The softbank back starter today based more than 200,000 registered users across Singapore and Indonesia and offers an inventory of 50,000 clothes and 2000 bags.

Ex Goldman Sachs banker, adrenaline and consultant husband chris Hallum got the idea for the company in 2000 and 16 after facing a common conundrum, having nothing to wear.

I think that ah ha moment came when chris actually questioned me and he's like you know what is it that you have so many clothes and you're always complaining that you have nothing to wear for someone who came from finance background using logics and and mathematics and it just suddenly felt like, wow, that's really a very illogical response that I have to fashion, having spent her early career working for a nonprofit in kenya, Rainer was keen to start a project that allowed her to do good and with the environmental damage of fast fashion coming to the fore, the opportunity was clear.

When I was working in kenya, you know, it was five a.m. In the morning, I cycled down to the village, I get to interact with the people directly, talk to them And really figure out how to help your business grow that feeling.

That just was something that I crave for after five years at Goldman.

So that's when we started talking a little bit more about potentially building up a company of our own that could really solve a problem that we care about textile production is one of the world's largest polluters generating global emissions equivalent to 1.2 billion tons of carbon dioxide each year.

That's more than all international flights and shipping combined since 2000, global clothing production has doubled within 15 years while the average number of times and apparel is worn before being disposed decreased by a third.

That inefficiency has warned a host of new clothing rental platforms seeking to satisfy conscious consumers with a guilt free alternative to fast and pioneered in 2000 and nine by us, platform rent the runway.

The circular fashion industry has bloomed over the past decade, inspiring other brands such as my wardrobe HQ in the UK and Glam corner in Australia.

Yet the logistical challenges of Southeast Asia have made it a tough market to crack.

That led newbie entrepreneurs Rainer and chris to adopt a test for strategy.

We started with witness first so we had enough number of clothes and enough capacity for customers and as the customers come in we are either proven right or proven wrong and then we continuously integrate from their very fortunately the business model was a hit.

It allows us to actually scale and that means like increasing the number of inventory, then increasing the number of customers.

The couple's data driven approach led them to switch from owning all the inventory in house to a consignment model in 2019 Under the new structure style theory holds stock on behalf of designers and individuals paying them each time an item is rented.

The company then takes a cut of the $95.00 and limited monthly subscription fee for the management courier and cleaning of goods.

That's savvy approach has won the minds and wallets of investors including Softbank, Alpha J.

Ventures and Indonesian real estate company, The Paradise Group who have backed the startup to the tune of $30 million.

Jeffrey joe, co founder and managing partner at investment firm Alpha J.

Ventures explained more when we invest in company, we always think about what is the problem that they are solving.

So the problem that they're solving is definitely for the users and in this case a lot of female users.

This also provide solutions as well to even the suppliers and designers to be able to reach this target market in a more direct manner.

And number three, we also believe that describe mental and re sales industry is also solving this environmental issue as well.

The funding indicates investment appetite for the young but growing sector.

The online clothing rental industry was valued at $1.2 billion 2019 by 2027.

That figure is expected to more than double growing at an annual rate of 10% to hit $2.8 billion dollars even before the pandemic.

We have a thesis, the rental kind of platform for sharing economy if you will is the future the whole industry, you just started a few years ago but we know that there's a strong trend towards that because at least the younger generation are much more comfortable being able to rent and then have the sharing economy rather than owning much of that growth could be led by ASIA pacific who's relatively nascent clothing rental market is ripe for disruptive players like style theory.

The region is forecast to account for almost a quarter of the overall market by 2027 Southeast ASIA in general.

I will see the market size of this segment is still tiny and uh it means two things.

One is that we need to spend more time to educate the consumer.

But secondly, if we look at the other side, we also see a huge potential.

This market is not as big as the other verticals like maybe Fintech, general e commerce and all that.

But we believe that this circular fashion market is big enough to create at least a unicorn in from Southeast Asia rainer and chris aim to capitalize on that opportunity by tailoring their offering to the specific needs of consumers.

In Asia, every country that we are in have a slight difference or what kind of clothes gets their lifestyle or what they actually prefer.

So that also meant that we had to cross every inventory for every market differently to.

Um the customers there are a little bit more modest so for them we actually try to get items that are a little bit longer, you know the sleeve length.

However, the outlook for the fashion industry is not without challenge.

The onset of the pandemic in 2020 struck a blow to retailers, denting profits and shuttering stores.

Meanwhile, with social engagements canceled and hygiene taking a priority clothing rental was hard hit until now.

Style theory has only recovered 75% of pre pandemic users but its new resale business for pre loved items has helped cushion the blow.

Obviously the pandemic is probably the most challenging time for us as a company, but also brought a ton of opportunities.

The most exciting one for us was actually fashion resales.

We've actually ramped up our fashion retail efforts, officially launched the platform last year and were able to grow that business panics in like 12 months Still, the style theory found as a confident fashion rental is no fad In its five years, the company says it has facilitated more than 2.3 million renters and saved more than 600,000 pre loved designer items from prematurely entering landfills.

Now it plans to expand into new markets and consumer base is starting with Hong kong later this year, we're expanding our category lines.

So like we're doing men's, you know, we want to also bring in more Children where kids were, I think those are some of the different services that we want to be able to put out for a bigger segment of the market that hasn't been able to enjoy fashion sustainability, That's some order to fill.

But despite the challenges, the husband and wife team say they found a good match for their fashion outfits, basically the business is a baby right for us.

So we definitely have to put a lot of course into that.

But other than that, I think the full trust, the full trust 100% alignment is really, really helpful and super important when you're making key decisions together.