The online global clothing rental market is expected to skyrocket in the next ten years, according to a report from Future Market Insights (FMI).
Clothing rental websites such as Rent the Runway, Rotario, Nuuly, Armoire, and Haverdash are beginning to cultivate a robust presence in the garment market. FMI states that online global clothing rentals in particular are projected to grow at a compound annual growth rate (CAGR) of 11% by 2031. Both standalone (single item) and subscription business models will experience a boom in sales. What FMI calls "ethnic wear," clothing particular to a specific region due to cultural influences, is expected to register a CAGR of more than 12%.
FMI anticipates that India will become a lucrative market due to the need for wedding garments, and areas in South Asia and the United Kingdom are expected to experience an influx in demand as well. The largest market share of rental clothing items will be suits and blazers, FMI says, as these clothing items are expensive and require maintenance over time.
FMI predicts that the growth of this very niche market is due to a number of factors. Product availability is increasing as existing companies expand and new ventures emerge, catering to the diverse tastes of international shoppers. Additionally, sustainability is a foundational reason why consumers gravitate to rental clothing brands. According to the FMI report, 350,000 tons of clothing goes into landfills each year in the U.K. alone, contributing to harmful carbon dioxide and methane production that environmentally-focused consumers want to reduce.
Finally, the historic growth of the e-commerce sector is another reason that online clothing rentals are slated to experience such a windfall. The ease of renting clothing online at a low cost with benefits like free shipping, tailoring services, or free trials will entice customers, and tech-forward firms with user-friendly platforms will result in high customer retention rates.