Vaibhav Doshi was a chief executive who grew tired of dealing with suppliers and event organisers, and decided to set up a marketplace that allows consumers to rent event necessities via a hassle-free, online marketplace: RentSher.
Since its launch in 2014, RentSher has served a variety of customers ranging from five-star hotels to government entities and private villas. What’s next? Expanding to cities outside the UAE and introducing an Arabic version of the website. Here, Doshi explains how he did it:
How did the idea behind RentSher first come about?
While you can rent anything from a car to a castle online, there is no platform to hire essential event requirements such as chairs, tables or electronics. We often struggled with organising parties because we would spend hours calling suppliers and negotiating prices. Most times, we would end up paying a premium fee to event organisers because we simply did not have the time. When we realised we were not the only ones getting frustrated, we decided to create RentSher as a hassle-free, one-stop shop.
What is your business model?
As with most marketplaces and on-demand companies, we do not pass on any extra charges to the customer, but generate our revenue from a revenue share arrangement with suppliers and asset owners who list their products with us.
How big is the rental market in the UAE? Besides the F&B and transport sectors, do you find that the market is untapped?
If you go to any event, most of the equipment is rented. With the lifestyle of millennials focused more on experience and less on ownership, the demand is set to increase. Say you go camping once a winter, you are better off renting camping gear as opposed to buying and storing it.
The market for rentals has been there for many years, but there was no marketplace enabling a connection between renters and asset owners. We are now playing that role and digitising the interaction. With ease of access, the rental market size will increase even more. This winter a lot of people have placed last-minute orders for heaters for evening parties.
What are the challenges you faced when you first set up the business, and what are the difficulties you face now?
The key challenge we faced was that there were no similar businesses in the market, so the licensing authority took some time to understand our concept and assign the proper licenses. It helped that we set up with Astrolabs, so we got access to its infrastructure and co-working ecosystem. Now we are focused on three things: reaching more customers, ensuring the delivery of the best quality products and hiring qualified talent.
Was RentSher self-funded at first, and how did you manage to eventually attract investors?
It is always challenging to self-fund a business because cash burns fast, and as an entrepreneur, you do not want to trade-off on building a great company. We bootstrapped the Middle East operations until December last year. We were then able to secure funding from several investors and are working on closing our fund raise in a couple of weeks. That was a bit difficult, because the ecosystem is still evolving and access to angel investors largely comes via a personal network.
Do you find that operating an e-commerce shop is costlier than running a physical store?
Traditional e-commerce is currently costly due to high marketing and acquisition costs, which take away the advantage of saving on rent and in-store staff. Hiring talent with the right digital skills is also expensive. So operating a website or app is certainly not cheap. Furthermore, while a physical store can survive on a small customer base, an e-commerce website needs to acquire the right mass of customers to be able to endure.
Having said that, e-commerce businesses have a great ability to attract a wide range of consumers online, especially as consumers become more comfortable with online services, while physical stores rely much more on location. Furthermore, event rentals are bulky and need additional logistics planning, which makes our value proposition more compelling than that of brick and mortar shops, where customers need to pick up heavy objects.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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