The house is rented, what about the appliances?
Editor’s note: This article is from the WeChat public account “New Retail Business Review” (ID: xinlingshou1001), author : Tian Qiaoyun.
“Is there a spring for home appliance rental?”
“The house is rented, but life is not rented.” This is a slogan of the home appliance rental industry.
Think about it carefully, but this sentence can’t stand scrutiny-the house is rented, and home appliances are also rented. Why is life not rented?
The slogan is intended to convey the young generation’s pursuit of quality of life, but quality of life is not directly related to purchase or lease. For the post-95s generation, the pursuit of quality of life is an attitude to life.
The change in the life attitude of the young generation has also prompted the consumption of the entire society to enter the era of consumption classification. The most direct comparison is that when the post-70s and post-80s were keen to buy houses and cars to accumulate assets, the post-95s started to rent houses and cars to enjoy life.
According to the “Real Estate Blue Book: China Real Estate Development Report No.17 (2020)” jointly released by the Institute of Ecological Civilization of the Chinese Academy of Social Sciences and the Social Sciences Literature Press in September this year, the post-90s and those with a working life of less than 3 years are Among the main renters, tenants aged 21 to 30 account for the highest proportion, reaching 61.3%.
“Leasing” seems to have become a key word in the lives of the younger generation. Based on this, home appliance rental business has appeared in the consumer market in recent years. What is the difference between home appliance leasing and conventional leasing? Who is this business facing? Is home appliance leasing a real market or a fake demand?
01 The difference between imagination and reality
“Home appliance rental? Just rent some second-hand home appliances. Will you return it when you run out?” Xiaokui (pseudonym), who just graduated this year and worked in Shanghai, heard the question of whether you would consider leasing home appliances. Asked rhetorically.
Next, after the retailer interviewed 5 95 95 people, their knowledge of home appliance rental was almost at the same level as Xiaokui. This result is beyond the imagination of retailers-people’s understanding of home appliance leasing is far less profound than that of home appliance leasing companies.
This confirms from the side some phenomena that have occurred in reality. This year, the home appliance leasing platform successfully obtained Series A financing “Taozu Gong“, which revealed a problem last year A big negative-A user believes that Taozugong’s rental model does not match the publicity. Some rental electrical appliances cannot be refunded after the lease term expires. The user questioned that this “rental exemption” is actually an instalment purchase.
This incident pushed “home appliance rental” to the forefront.
There is no doubt that traditional lease and purchase are essentially two completely different consumption patterns. The biggest difference lies in the ownership of property rights.
During the lease term, the property right is not owned by the user, and the user only has the right to use; the purchase is different. When the consumer behavior is completed, the property right is transferred immediately, even if it is purchased in installments, the property right is also paid for the first installment The transfer occurs after the payment.
Take buying and renting houses as examples. When the buyer pays the down payment and the bank’s mortgage plan takes effect, the buyer is actually the property owner of the house, even if the property purchase method is a mortgage; while leasing is different, the lessor only has to pay the rent during the agreement Later, as for the right to use the house, once the lease term expires, the lease will either be renewed or moved.
Based on the understanding of traditional leasing, many people will extend this concept to home appliance leasing, thinking that leasing home appliances is also paying a certain rent during the lease period to have the right to use the home appliances. After the lease period is over, these home appliances will be returned. Will be rented by the next user.
In fact, in the home appliance rental industry, most home appliance-based products (such as washing machines, refrigerators, etc.) are highly private. Coupled with the high frequency of use of home appliances, second-hand home appliances are prone to maintenance and difficult to depreciate. As a result, most home appliance leasing companies or platforms currently adopt the financial leasing model.
Financial leasing is now a very common non-bank financial model in the world. China began to introduce this model in the early 1990s. After 2007, the domestic financial leasing industry has entered a period of rapid growth, but it is mainly concentrated on the B side (enterprises and enterprises).
In recent years, with the changes in the consumption era, financial leasing has begun to reach C-end consumers. The “snap car” of the auto industry is an early adopter of this model. However, early consumers had less awareness of financial leasing, and playing a car also triggeredOvercoming the controversy over “whether it is to rent a car or buy a car in installments”.
For this reason, people in the industry remind that there are three simpler ways to distinguish between traditional leasing and financial leasing:
One is to look at whether the leased item is movable or immovable. Traditional leasing is mostly used for real estate such as real estate, and modern financial leasing is mostly used for movable property;
The second is to look at the degree of newness of the goods. Most traditional leases are second-hand, while modern financial leases are brand new;
The third is the transfer of property rights. In the traditional leasing model, the lessee only has the right to use, while the financial leasing model can choose to pay a certain fee to buy out after the lease term expires, thereby becoming the property owner.
02 The home appliance rental industry in its infancy
In May 2020, the National Development and Reform Commission, together with the Ministry of Industry and Information Technology, the Ministry of Finance and other seven ministries and commissions, launched the “Implementation Plan on Improving the Recycling and Treatment System of Waste Household Appliances to Promote the Renewal of Household Appliances” to further encourage household appliance manufacturers to carry out household appliance leasing Business, to create a good environment for the development of new business types of home appliance leasing, and to better meet the consumption upgrade needs of housing rental personnel.
This move is interpreted by the industry as the coming spring of the home appliance rental industry.
According toEnterprise search data shows that the current total keyword in my country is “home appliance rental” There are 110,300 related enterprises.
In the three years since 2017, the number of registrations of home appliance leasing-related companies has increased year by year. In 2017, 2018 and 2019, there were 12,500, 18,300 and 22,800 related companies registered respectively, and a year-on-year increase of 25 in 2019 %.
As of November 1 this year, 26,200 home appliance rental-related companies have been registered, exceeding the number of registrations for the entire year of 2019. However, in terms of capital, the number of household appliance leasing-related companies with a registered capital of less than 1 million yuan is the largest, accounting for about 51%.
Obviously, the home appliance rental industry is currently in the initial stage of development.
From the perspective of customer groups, currently home appliance leasing companies mainly serve two types of people, one is long-term rental apartments and government public rental housing customers at the B end, and the other is pure personal use at the C end.Household or landlord.
Established in Shanghai, “Easy Living” started from the C-end home appliance leasing business, and its business has begun to develop to the B-end. On its official website, Vanke, Lianjia, and Xinpai Apartment are displayed as cooperative merchants.
Enter the Alipay mini program, you can see “Home appliances, household appliances, environmental protection Five major business lines: furniture, decoration, and digital equipment.
From the perspective of the business model, the current ease of living and Taozu Gong are both Sesame Credit free Pledge to provide users with leased products, there are three forms of lease renewal upon expiration, return upon expiration and exemption after lease.
As a platform, EasyStay uses a combination of self-operated + rental business accommodation, while Taozuo uses self-operated and co-branded rental products.
From the perspective of products, the recommendations on the homepage are generally more cost-effective. Take the Yadu KJG3066DR air purifier on the homepage of Easy Living as an example. There are three rental periods of 3 months, 6 months, and 12 months. The corresponding monthly rents are 216.67 yuan, 108.33 yuan and 54.17 yuan respectively. The maturity buyout prices are respectively 129.99 yuan, 130.02 yuan, and 129.96 yuan, with a total price of 780 yuan. In Taobao, this air purifier costs at least 899 yuan.
Interestingly, on the Alipay applet, Alipay has also opened an official leasing service aggregation platform called “Rental Life”, which brings together some smaller or more subdivided leasing companies. The current platform There are exchange rental machines, Qiao rental machines, hedgehog rental machines, borrowing opportunities, and local dogsMany leasing companies, such as, Bajiezu, and Pianqin La, have moved in, involving mobile phones, cameras, game consoles, and musical instruments.
Is 03 a real market or a fake demand
Peiqi, born in 1995, is the only retailer who has had the experience of leasing electronic equipment among the people who investigated the topic of home appliance leasing.
The year before last, she and her friend Meeting to dive in Boracay, Philippines. I want to take some photos as a souvenir. Without professional equipment, they finally rented a GoPro sports camera in a camera shop.
She said that she is more willing to try this kind of non-high-frequency electronic equipment. As for the commonly used household appliances, “leasing will greatly reduce happiness, why not buy it directly through installments.”
Peqi’s idea is not uncommon. Chinese people are extremely concerned about the different ownership of property rights brought about by lease and purchase. “These small home appliances are not expensive now, and the purchase cost is not high. In addition, some small home appliances are very personal items. The leasing of such products has no future in the short term.” An executive of a domestic small home appliance company held a similar view.
Outside China, home appliance leasing is nothing new.
Tao Zugong, who entered the Chinese home appliance leasing track with small appliances as an incision, was initially established after seeing the maturity of the foreign leasing market.
In the United States, Rent-A-Center is a large-scale chain of daily necessities rental company established in 1986 for individual users. The goods provided include furniture, home appliances, electronic products, etc., and it is currently in the United States, Mexico, Canada and Puerto Rico There are more than 3000 stores in other countries and regions.
CORT is a leading chain furniture rental service company in the U.S. and even the world. Its characteristic is to provide home rental packages, including lights, potted plants, etc. For second-hand goods that have expired, CORT will also sell them through low-price discounts.
Some analysts believe that the maturity of the leasing model in developed countries such as Europe, America and Japan is related to their recycling and processing of second-hand furniture and home appliances.
In these countries, disposing of second-hand furniture and home appliances often requires an expensive waste removalTherefore, whether you are renters or those who like to change frequently, they prefer to choose a rental method that has no worries.
According to public reports, Taozu has already started home rental business in the United States and Canada. This year, its North American business has been profitable for several consecutive months.
Qi Jiguang, the founder of Taozu Gong, said in an interview with the media that in the future, the use rights, ownership, and income rights of many industries will be separated, and leasing will become one of the important forms of people’s consumer goods in the future.
With the increase in the number of renters, some scholars said that “the right to use is greater than the ownership” will be expected to become a new consumer trend in the future.
For brands, this trend may help them add new circulation methods and bring breakthroughs in sales performance. But for consumers, whether the right to use the lease model can ultimately replace the ownership of the purchase model has nothing to do with the size of the leasing crowd. The key lies in whether the Chinese people’s concept of property rights can change.
Behind the concept of property rights is not only related to the promotion of commerce, but also inseparable from the influence of policies.
After all, if China also implements a model that requires payment for furniture and home appliances recycling, renters will probably have to consider the processing costs caused by buying “large items”. At that time, the home appliance rental industry may be able to truly welcome Come spring.