From a full disclosure perspective, I am part of the Furlenco bandwagon which has been in the rental segment for little over 3 years now. Given my role, I am also privy to the growth numbers of at least the furniture and appliances part of the rental economy. So do read the below from that lens.
The concept of shared economy is slightly different from rentals. The out and out pure shared economy is all about peer to peer under-utilized resources to be shared around in a possibly economic way.
That said, there are lot of variations. The age-old concept of "I have a spare tool kit that I use once in a year which can be shared around", according to me, is not a viable shared economy model. Reason is simple, even though your tool kit is sparingly used, the cost of buying is not prohibitive and neither the unit economics of moving it from one house to another is scalable. So No. It hasn't worked anywhere.
But does the unit economics for sharing old piece of furniture between peers work? Probably yes. But again it is not a scalable business in India because the problem in India is that we do not have a spare sofa or bed to give to our peers. We just don't have the space or money for it. If you really have an old sofa, the economics works better if you sell it rather than rent it. And sofas are either fully utilized or not utilized at all. The idle time of sofa not being used in the house cannot create a shareable economy purely because of the nature of the usage of the product. And please let's not talk about your extra side table that you want to rent, because that's not what people want. So in both cases peer to peer lending of furniture (that people want to rent) for short or long duration is tough to work in India.
Anyway, what we see in the market is that India is not a country of surplus. We just don't have spare cars and furniture to share around.
So does that mean shared economy won't work in India? No not really. It could but before that rental economy has to pick up. According to me, shared economy is a higher order manifestation of the rental economy.
Now about the rental economy, oh yes, absolutely. I keep telling the analogy of gear-less car. Of all countries, it is India that you need the highest amount of gearless car and not United States (read traffic and paining clutch-pinched legs). But the funny fact of the matter it is the other way around.
Similarly, it is here in India that the real need for rental economy exists. Reasons are aplenty and in no particular order -
(1) Unlike the previous generations, the millennials and even slighter older folks (myself included) are always on the lookout for their NextBigWHAT - new jobs, new home, new car, new bike, new city, new country. Our survey says that urban Indians these days move at least once every 3 years. The last that these guys want to deal with is commitment of any sorts. Rental answers that.
(2) When you are in this mindset of NextBigWhat, all complicated & expensive purchases are delayed. Note that it is an AND condition. It has to be both complicated and expensive. iPhone is expensive, but not complicated because you can slip it into your pocket and move around. Arranging a vacation trip with friends to Coorg is complicated but not necessarily prohibitively expensive. But HOUSE, CAR, FURNITURE & APPLIANCES are all complicated & expensive purchases. Do we realize that cost of an iPhone is same as the cost of a good sofa? But they have very different customer buying journey. We will think 10 times before buying an expensive sofa because even before buying we need to think all the what ifs for the next 3-5 years. Because it is hassle-filled to get rid of it. And sofa is just one piece of furniture.
Rentals take out the uncertainty around accessing a complicated, expensive product.
(3) Finally, because things are complicated and expensive and we are not ready for it yet, Indians tend to procrastinate their aspirations forever. Our parents used to wait till retirement before spending anything. At least millennials have started enjoying their gadgets now. But lifestyle products like furniture are still pushed to future.
We at Furlenco are solving for #3. We are basically saying that you should never own furniture and that you should adopt this as a way of life because we believe that this will ensure that you will live a better life NOW. Of course it has to be backed by innovative product and services and that's where the focus is for Furlenco.
Lastly, as a testament to the growth of rental economy - we call it subscription economy - post our Series A funding, over 5000 houses have been furnished by Furlenco in just two cities in a matter of 12 months and we are growing at a monthly pace of 20%+ MoM with rock solid revenues and unit economics to back it up.
So if you ask me, rental economy, at least in the furniture and appliances space, will give buying its run for its money.