After homes, cabs, electronic goods and furniture, you can now get the latest mobile phones on rent.
Aiming to penetrate deeper into the mobile smartphone market in the country, companies such as Apple, Google and Samsung have tied up with renting platform RentoMojo to lease mobile phones on monthly rentals basis. The rental charges range from Rs 2,100 to Rs 9,300 a piece, depending on the model and brand, which are lesser than the traditional ‘EMI with interest option’. The users will also have the option to buy the phones at the end of the tenure comprising six, 12, 18 and 24 months.
According to PricewaterhouseCoopers, by 2025 the sharing economy will become a $335 billion market globally. With mobile phone brands launching at least one new version of phone every year, and more and more features getting added, about 55 per cent of the urban millennials are upgrading their phones almost every six months.
“We are targeting this customer group as well as those who are opting for EMI options instead of paying the price upfront, through our rental monthly instalments,” said Geetansh Bamania, founder and CEO, RentoMojo.
Handsets such as Apple’s iPhone X and 8, Samsung Galaxy S9, Note 8 and Google Pixel2 are currently on offer. If a customer is opting for say an iPhone X, the EMI for a 12-month tenure, the EMI for it comes to around Rs 5,500. However, RentoMojo is offering this at a monthly rental of Rs 4,500, thus, saving the customer Rs 1,000 every month. The user can either opt to return the product after the end of the tenure or buy it after paying the outstanding amount which would be 5-10 per cent more than the upfront cost of the product.
However, there’s a catch. As the demand for phone on rentals increases, the company would also be refurbishing phones and redeploy those for new users. Hence, a user won’t know if the phone is refurbished or new if he is keen to buy it at the end of the rental tenure.
The company would also be offering phones in the price range of Rs 10,000-15,000 soon as the highest EMI adoption is happening in this range, said Bamania.
The handsets will be available with a screen guard and back cover to prevent any damages. The Bengaluru-based start-up has tied up with Google, Apple and Samsung, which will take care of the cost if there is any manufacturing defect in the phone. However, if there is a major damage, the user will have to pay for it, according to the contract.
But Bamania is positive that this won’t hamper the growth of the segment. “The best proxy that we can see is the television segment. We have around 15,000 units in the market and only 0.2 per cent of our topline has been used as a repair and maintenance cost,” explained Bamania.
The company, backed by Accel Partners, IDG Ventures and Bain Capital, is looking to add 50 per cent of its customer base, which currently stands at 50,000, from this new segment, over the next two quarters. For now, 40 per cent of RentoMojo’s revenue comes from the electronics segment, followed by furniture and bikes.