Home electrical products. Why rental sites flourish
For electronic devices, circular Economy models that maximizes convenience and minimizes expense for consumers gain traction in Europe.
At the end of July 2021, the Berlin-based startup Grover that specialises in subscription-based model for rental of technical product raised US$1 billion from Fasanara Capital. Founded in 2015 by Michael Cassau, this tech rental company includes Samsung among strategic investors. The service offers 475,000 items, especially mainly computers, drones, game consoles or electric scooters. Recent diversification has moved into health and fitness such as exercise bikes or treadmills.
Selling in Germany, Austria, Spain and the Netherlands, the service will launch into the U.S.A. by the end of December. These new funds will create two commercial entities: one dedicated to product ownership, the other to subscription management. In 2020, Grover reported a net turnover of €50 million via 100,000 active subscribers. It aims to reach 450,000 active subscribers by the end of 2021. Profitability is to be closely monitored, as logistics costs are high in this type of business, paying for shipping, repairing, repackaging and reshipping.
In France, the startup called “Les Biens en Commun” proposes centralised home-electrical products used and stored in each building via a pooled rental system, offering equipment like vacuum cleaners, irons, deep fryers or waffle irons. “On average, electric drills are only used for 12 minutes in their lifetime and vacuum cleaners, each bought by 90% of households, remain idle for 98% of the time. We want to communally share small appliances that are used less than once a month,” summarises the company founder, Yann Lemoine. Supported by Bpifrance, SEB, Leroy Merlin and Boulanger, the company started services for student accommodation and now sells to social landlords and property owners as a 2nd stage. At StudiLodge (Lyon), 30 home-appliance products are available in the building lobby, within a cabinet equipped with connected lockers. Reservations and payments are made online and a QR code opens the secure locker. The quality of the items is checked weekly and “bad” users can be identified via rental history. In France, Monoprix and Leroy Merlin offer a rental service of household appliances, but consumer adoption remains low, given time spent in planning, use, collection and return times.