Beg or Borrow your Handbags
There are at least 14 Louis Vuitton stores in Tokyo and along with New York, it is among major global cities for the brand because Japan had been a reliable market for luxury brands. Even after the bubble economy burst, OL (office ladies) were still buying their Louis Vuitton purses and wearing their Frank Muller watches.
Today, a new phenomenon with smartphone apps has caused an industry-wide evolution, as many consumers are “borrowing” luxury items that may be out of their price range; companies have met the demand by renting out their products to give customers access. One of these is the Laxus App.
- Ordering is very easy.
- Simply choose the bag you like from more than 21,000 items in their collection.
- Enjoy the bag for as long as you want.
- When you get tired of your bag, exchange it for a new one.
- Just choose the next bag you want on the App and exchange it.
- Laxus will ship it to you free of charge.
- Insurance against rips is included, so no need to worry （Covers all scratches from ordinary use).
- All bags are appraised by specialists to give assurance of quality.
The fixed monthly price is 6,800 Yen ($60) and you get to rent trendy bags like a Louis Vuitton tote.
Officially, it’s called a “bag sharing service”.
The ‘Office Ladies’ love it because they can swap bags frequently before they become emotionally attached to any model. They particularly like the “all-you-can-use” offering that allows them to choose from a lineup of over 21,000 luxury bags. It means that rather than owning just a few, you get your pick of the bunch.
“Once you use a luxury brand bag, you definitely recognize how good it is. I can’t go back to cheap bags.”
Why have we not heard of this before?
Laxus Technologies Inc. launched its App in February 2015.
“Drastic price reductions triggered a paradigm shift in fashion as happened in Japan’s mobile market over the past two decades,” founding CEO Shoji Kodama said, “Women weren’t able to enjoy fashion fully, but now a shopper does not have to spend several hundreds of thousands of yen on a single bag purchase. We can change their mindset.”
At Laxus, the most popular brands in Japan are Louis Vuitton, Prada, Fendi, Chanel and Gucci. Historically, small dress rental businesses have offered luxury brand bag rentals with relatively higher fees mainly for special occasions.
The ‘killer application’ that Kodama implemented is to target everyday users as a “totally vacant slice” of the market.
The key is the user herself; one such Laxus user invited 67 people to join the service by word-of-mouth or social media; this is what grew the business exponentially.
The average price of bag in the Laxus collection is about 300,000 yen ($2,700). The value of bag rental transactions through the App is based on the market price of each bag when it is borrowed. The accumulated value reached 10 billion yen ($89 million) over the past two years and it is still rising despite slowing growth in Japan’s imported bag sales. The rise in sales tax from 5% to 8% did not help matters.
Laxus started to expand its existing customer base made up of mainly 24 to 50-year-olds by introducing Laxus X, a consumer-to-consumer rental service App released in early 2016. They hope to attract ‘millennials’. Individuals can rent out their personal bags to make money or build credits. Currently, about 14,000 people borrow bags through Laxus X, while 6,000 people are offering a total of 16,000 bags for loan. Most women on the street carry reasonably priced brands such as Coach.
One lender offered five bags for rent last year; two of them were Coach bags and a Louis Vuitton bag have been borrowed for around 300 days each. “People would be reluctant to buy the two Coach bags as they are vividly coloured and lack versatility,” she said. She bought her five bags for around 100,000 yen and has made over 81,000 yen!
Laxus X provides maintenance and storage of bags as an added bonus. Insurance for damage to bags, quality and authenticity, using over 30 appraisers, is also assured and included in the monthly fee.
Now, the World…..
Laxus received positive responses from over 100 New Yorkers wanting to join the service and pay the 200,000 yen ($1,800) deposit as well as a fixed monthly fee of $100. Laxus dispatched a dozen staff to New York to prepare for launch last October.
“New York is an ideal place to launch our service,” said Kodama. “The city has a number of luxury brand flagship stores with very high recognition. Americans are not reluctant to rent things from others, just as they happily use Uber and Airbnb.”
Next, Laxus is considering expansion to London, Paris, Hong Kong and Singapore.
Japan was reputed to be the world’s only mass luxury market (remember the Office Ladies?) but that trend is declining. The luxury branded goods sector now is confined to wealthy individuals spending from stock market gains and shopping sprees by visiting Chinese tourists, based on reading between the lines from a report by the Japan Department Stores Association.
This may the way forward for the ‘millennials’ before they join the mass luxury market; the Airbnb of the handbag world…..
In case you are wondering, here is the list of current brands of handbags on offer:
DOLCE & GABBANA
Marc by Marc Jacobs
Author’s Biography: Melvyn Teillol-Foo (MTF)
Dr Melvyn Teillol-Foo is a contributor on AlphaLuxe web-zine.
He is also a moderator on PuristSPro.com horology discussion fora. He blends his scientific medical objectivity from the pharmaceutical industry with purist passion, in his musings about watches, travel, wine, food and other epicurean delights.
His travelogue ‘Lazing’ and feasting ‘Grazing’ series of articles have now passed into “mythic legend” on the original ‘ThePuristS.com’ website. Those were the halcyon days when he was “rich and famous” that he remembers with bittersweet fondness.
Dr Teillol-Foo is a quoted enthusiast on the watch industry, appearing in feature articles and interviews by Wall Street Journal, International Herald Tribune, Sunday Times (London), Chronos (Japan), Citizen Hedonist (France) and other publications. He has authored articles for magazines like International Watch (iW) – both U.S. & Chinese editions, ICON (Singapore), August Man (Singapore), Comfort (China) and The Watch (Hong Kong).