Luxury for lease

Rentalsoftop-brandgoodsmightbethewayofthefuture. Zhao Ying from China Features reports.
RenJiansongputspayinghisrentaheadofbuyingthepriceyluxurygoodshesoadores- prompting the 26-year-old fashionmonger to frequently rent luxury goods from a Beijing-based boutique. His most recent rental was a Louis Vuitton Damier Naviglio. The brown and tan messenger bag retails for about $1,600, but Ren paid 180 yuan ($29) to borrow one for three days. He also paid 90 yuan to rent a $700 Louis Vuitton wallet for three days. "I can afford to buy any of them, but I don't think the prices are acceptable," says Ren, whose annual income is nearly 220,000 yuan.
"I need high-end Cheap Chanel Bags for parties and business meetings, because they help refine my image," he explains.

TheBeijingnativeknewlittleaboutluxurybrandsbeforehestartedworkingforafashionstorein2009. He purchased two bags - one by Chanel and one by Dior - and a Cartier ring for a total of 63,000 yuan.
In2010, he registered his own company aimed at helping globally acclaimed brands promote Classic Chanel Bags sales in Chinese shopping malls and on websites.

Today, the sales agent travels across China to organize marketing activities for his clients, which include Louis Vuitton, Bulgari and Chanel.
Buthestoppedbuyinghigh-endgoodsin2010 after discovering V2, a fashion Chanel Bag Price boutique in downtown Beijing's Guomao area.
Inadditiontosellingnewandgentlyusedluxurybags, V2 also offers shoppers a chance to lease used luxury goods - a rare service in China.
Torentgoods, a customer must put down a full-price deposit and pay a daily rental fee of about 3 percent of the item's retail price.

Todate, How Much Are Chanel Bags ?Ren has spent more than 60,000 yuan at V2.
"Ordinary people don't have many occasions to use luxury products, so why not just rent one when you need it?" Ren says.
WhileRenfrequentlyrentshisluxurygoods, his peers have become obsessive buyers of such products.
Chinaistheworld's fastest-growing market for luxury goods, thanks to years of stable economic growth that has boosted the spending power of superrich consumers.
ForbesmagazinereportsChinahadatotalof146 billionaires in 2011 - up 14 percent from 2010 and second only to the United States, which boasts 413 billionaires.
"Actually, many buyers are just attracted by the logos and don't know much about the brand culture," Ren points out.

Chinesepeopleenjoyflauntingtheirwealthinpublicandbelievequalityproductsemblazonedwithworld-famouslogosrepresentdignity. But they prefer to own, not rent, says Kong Liang, manager of Oursjia Rental Service Co Ltd's branch in Jiangsu province's capital Nanjing.
"Some rich people show off wealth using luxury goods, while some salaried workers skimp on daily expenses to buy high-end products," Kong says.
Thejointventure, which operates dozens of shops in China's mega-cities, offers a wide range of products for lease, including home appliances, furniture, digital products, vehicles and luxury goods. The daily charges for similar goods are almost identical among different shops, so customers do not worry about bargaining, market researcher and V2 co-founder Yang Xu says.
Regulardisinfectionsandrepairsalsoimprovecustomersatisfaction, Yang says.
YangandhisfriendsopenedV2 seven years ago, but the first year was a disaster. Few customers turned up.

Yangkeptmarketingonline. He opened a boutique on China's largest Internet trading portal, Taobao.com, and regularly updates his micro blog to promote the new business model.
Rentalshaveincreasedbyabout5 percent annually for the past several years. Handbags, purses and suitcases are the most popular choices, Yang says.
ButV2 still depends on sales, as the rental service accounts for only about 3 percent of its overall trade volume.
"I don't expect profits from the rental deals," Yang says.
"The service meets the demands of a small group but may bring in more potential buyers."
Hebelievesitwilltaketimeforpeopletobecomefamiliarwithandacceptthisnewconsumptionmode.
Amajorchallengeispresentedbytheomnipresenceofcounterfeits, which causes people to doubt the authenticity of rental luxury goods.
Andsomecustomerstrytoduperentalservicesbyreturningfakebags.
Yangsayshehaslearnedtodistinguishcounterfeitgoodsaftermanyyearsofpractice. V2's rental contracts stipulate that any customer who replaces V2's genuine products with fake goods will not have their deposit returned.
Therentalcontractalsorequirescustomerstofootthebillforminordamages, but Yang says most customers take good care of the items.
RenhastraveledthroughoutthecountryandsayshehasyettofindanotherserviceoutsideBeijing.
Ren's girlfriend, Tian Jing, is also a luxury brand devotee and disciple of his service.
Beforethecouplemet, the China Minsheng Banking Corp Ltd employee, who earns more than 10,000 yuan a month, blew more than 120,000 yuan on handbags and jewelry from Hermes, Chanel, Dior, Prada and Cartier during overseas tours.

"My colleagues carried luxury handbags and suitcases during our annual travels arranged by the bank, and I had to catch up with them," Tian says.
"But I found renting is perfect for meeting occasional needs and saves a lot of money. My friends and many bank staff members also like the service very much."
ZhuLi, manager of a luxury store near Beijing's high-end SCITECH Plaza shopping center, says: "By leasing, salaried workers can enjoy luxury brands. It saves resources and maximizes the use of high-end products."
Thebusiness' peak seasons are around holidays and year-end periods, when individuals and companies need luxury products for parties, banquets and celebrations, she says.
WangShijia, a 28-year-old clothing wholesaler, regularly visits Zhu's shop to rent handbags for banquets.
Wang, who was born to a wealthy family, owns nearly 50 products from a range of luxury brands but prefers to rent.
"After I started my career, I realized that it's not easy to earn money, so I've stopped squandering," says Wang, whose monthly income is nearly 50,000 yuan.
"If one can afford it, luxury goods can help to show one's taste and dignity. Otherwise, it's shameful to spend so much for nothing more than vanity."
YangandZhushareoptimismabouttheluxurybrandmarketandbelieveinChinesewealth's growing momentum.

ChinaisexpectedtoreplacetheUnitedStatesastheworld's biggest consumer of luxury brands by 2012, a report by Ipsos' China office said last October.
Mostbuyersareyoungerthan40.
Mainlanderspurchased$9.4 billion worth of luxury products in 2009, and the figure increased by 14 percent the following year, global market researcher Zheng Wenliang says, citing the report.
GlobalconsultingfirmMcKinsey& Company estimates luxury sales in China will grow by 18 percent annually to reach $27 billion by 2015, when it will account for more than one-fifth of the global luxury market.

Whilepraisingthefledglingluxurygoodsleasingindustry, experts have called for leasing options to cover daily consumption and production equipment to meet diversified social needs.
StateCouncilresearchfellowChenWenlingputsitlikethis: "Renters should offer services at various levels to cater to clients from different walks of life."