Rental Market Thrives Well in Downturn
by Bidhata Rai
A subdivision of development onlookers seems to take an odd sort of glee whenever the market falters.
Cash strapped consumers seek for cost-effective substitutes for high street spending and are turning towards the rental market.
A new generation of rental companies is emerging in the downtown to take advantage of the government backed bank loans. The economic gloom has paradoxically contributed to the glory of the rental markets.
“We are going into the recession with quite a wide choice of value retailers, but when it comes to more expensive products, perhaps we are thinking more about renting,” said Maureen Hinton of Verdict Research, according to the Financial Times.
Internet sites boost demand
The internet has made life cheerful by making renting just about everything from televisions to furniture and jewellery much easier.
Not just stationary commodities, but you can also rent pets through the internet. Erento, an online renting marketplace for niche lending services, which offers from holiday homes to cameras made a profit of 92 percent in January alone.
“The credit crisis is probably the best thing that has ever happened to Erento,” said Clinton Patterson, its director of international operation reports FT.
All this leads us to contemplate that people prioritise cash and veer towards more rentals as times get tougher.
A market research group, GfK has recorded a leap in rented television in the total TV market from 2 per cent in 2004-05 to 9 per cent in 2008.
Zilok, a French site, launched in UK in 2007, plans to accelerate its international expansion in response to the opportunities flourishing during the economic downtown. Zilok does for rentals what Ebay does for person-to-person selling.
Growing profits
Handbag Hire HQ (online handbag rental business), DIY products (dealing with construction equipments), Hire station (rents tools to businesses and consumers), Brighthouse (rents household goods), and car clubs all saw a huge growth in their profits in the current economic gloom.
Games consoles, party dresses and baby equipment are the most popular items rented.
While other sectors deteriorate in market value, rental business continues to thrive well during the recession.
Even if rental rates slip amid increased competition, the growing population will make the community as a whole stronger.
