Japanese women might be famous in the world for being the most obsessed over brand-name bags and accessories. Some of them travel abroad to take advantage of cheaper prices. However, amid the recession, some women are adopting a more cost effective consumer behavior -- borrowing brand-name items for limited use and time, which is a U.S. business model.
“Second-hand brand-name items are now widely accepted in Japan as online auction and recycling companies are increasing,” says Mitsue Iwata, president of Newell Corp, whose “Cariru” service lends brand bags and jewelry items. “Some of our customers live in residential areas for relatively rich people. We even ship our items to families of politicians. We imagined that those who cannot afford to buy brand items would make us of our service at first.”
Launched in June, Cariru, whose name comes from the Japanese “kariru” (borrow), currently has about 450 members. About 85 people make use of its service every month. The service deals with approximately 170 items from 14 brands such as Chanel and Louis Vuitton, renting individual items for 1,000 to 40,000 yen a week. The items even include a Hermes’ Birkin bag worth 1 million yen, which is only for premium members. Iwata says items for 1,000 to 6,000 yen a week are most popular.
Iwata says buying brand-name items at individual brands’ own stores used to be common among people. But due to the recent recession, many people are rethinking the value of second-hand brand-name items. “In a difficult economic situation, fewer people can afford to buy luxury items. Even those who can afford it might think they should borrow what is necessary only when it is needed.”
Iwata says her customers make use of rental bags for occasional events, such as PTA parties and re-union meetings. Some of them borrow Cariru’s items as a sort of trial so they can decide whether to buy them or not.
Iwata used to work for a subsidiary company of major international trading company Itochu Corp as a dealer for brand items after she graduated from the University of Boston. She quit the company after her marriage and pregnancy but started a home business, importing brand-name items and auctioning them on the Internet. Facing a decline in business, Iwata switched her business to a rental service with existing products.
“I found the growing rental business for brand-name bags in the United States last year, which was surprising to me because I never saw ordinary Americans with such items when I was a student there,” says Iwata. “Japanese must love brand-name items more than Americans do.”
Iwata sees big potential for her business in Japan. “America’s ‘Bag Borrow or Steal’ service now has 700,000 members who pay $5 for monthly membership. Their profits include rental charges and direct sales.” She thinks Cariru could increase its membership to 2,500 and mark 5 million yen in sales a month by next June.
Iwata, however, has localized the U.S.-origin business model for Japanese consumers. “Price comparisons between retail stores and our prices are a must for online shopping. We also grade the condition of each item because Japanese people care about it.” As a result of those efforts, about 30% of Cariru users end up buying the rental items.
Cariru is currently targeting women consumers but is considering increasing its line-up f items for men. It also plans to launch an English inquiry and order process in December for foreign customers in Japan. Iwata says Cariru’s members are steadily increasing in the current unpredictable economic situation.
For further information, visit: www.cariru.jp© Japan Today