According to data from the 2017 RateSetter Sharing Economy Trust Index released earlier this year, the value of Australia’s sharing economy is expected to hit $55 billion across the next five years, with over two thirds of Australians now actively spending on or earning from a sharing economy service.
While the likes of Uber and Airbnb may be the bigger names in the space, a growing number of niche platforms are tapping into the opportunities within the peer to peer model, with one being Designerex.
Launched by Kirsten Kore and Costa Koulis last year, the Sydney startup enables both women and dress rental businesses to list and rent out their designer evening or cocktail dresses through the platform.
Previously a real estate agent, Kore said the idea came from her own experience wanting to find the perfect dress for an occasion but not wanting to pay upwards of $1,000 knowing she would only wear it once. With this in mind, she sought to develop a solution.
The platform allows users to search dresses from other users or dress rental shops by brand, size, or event date. Once a booking request has been made and then accepted by the lender, the renter will receive automated SMS and email reminders through the rental period telling them where their dress is, while their dashboard also holds all these details and updates.
For lenders, creating a listing is free, with a service fee only charged if they accept a booking request; lenders must accept booking requests within 24 hours. On a listing, a lender can choose their own fee, as well as cleaning, shipping, and security deposit costs.
The Designerex fee ranges from between 16 to 25 percent, scaling down depending on the total transaction amount, with a minimum fee of $19.95.
“Initially, we had explored how other sharing economy platforms were charging, though we soon realised how different the female designer dress rental product is, compared to hotels, cars, or taxis,” Kore said.
“Ultimately, we felt that this pricing worked for everyone, and it also worked for maintaining the highest in standards for security for both the lender and renter, so we ran with our gut feel.”
Designerex has specific criteria for items accepted to its platform: they must have a minimum RRP of $249, be in excellent condition, and be part of a collection from the last two years.
As well as giving both sides of the marketplace the ability to review each other, Designerex has also integrated ID verification technology into its platform. After uploading a picture of their driver’s licence, which is then scanned by Designerex to determine its legitimacy, renters and lenders earn a ‘Verified ID’ badge on their profile.
“We see the incorporation of real time ID verification within the sharing economy as critical and absolutely necessary to enable us to scale the business and provide our customers with the ultimate secure experience,” Kore said.
Despite this, Kore said the team was surprised by the number of users who have chosen to verify their ID.
“We always knew that security was important in a peer to peer platform, but it wasn’t until we actually started to see girls scan their driver’s licenses or passports online that we ourselves could confirm it was something that was really needed in a designer dress sharing marketplace,” she said.
“We also learned that both renters and lenders want to know where their dress is, at every step of the way, which is why we quickly integrated tracking, to enable our users the ability to track their dress directly from their Designerex dashboard, keeping renters and lenders in sync.”
With around 4,000 dresses listed, these lenders and renters are, for the most part, aged 18 to 45, though Kore said the platform’s most active renters – those renting a dress every weekend – are aged 18 to 25. This growth was first driven by social media marketing, with word of mouth then playing its part.
Designerex is one of a handful of local startups playing in the peer to peer clothing rental space.
One of the more better known Australian startups in this growing market is GlamCorner, which has raised funding from Airtree Ventures. Launched by husband and wife team Audrey and Dean Jones in late 2012, it allows women to hire out dresses from designers like Zimmerman and Alex Perry for 10 to 20 percent of their retail price.
Also launching in this space last year was HUMM, founded by Melbourne-born, New York-based Mackenzie Casey to focus on high end or luxury fashion space.
For Designerex, the focus is on growing further across Australia before looking to overseas expansion.
Image: Kirsten Kore and Costa Koulis. Source: Supplied.