Why buy a bed when you can simply subscribe?
What to do?
Now, you can subscribe to a furniture rental service just like how you probably subscribe to Netflix.
Well, not exactly like how you subscribe to Netflix.
Since furniture comes at an usually high cost, the subscription service requires its users to keep a minimum contract of two years by paying recurring fees.
Megong, a local furniture subscription service launched last February, provides about 800 products including sofas, beds, tables and chairs as well as soft furnishings like lights and cushions.
Local furniture brands such as Jackson Chameleon, Munito and Oblique Table are available through Megong's subscriptions.
If you want to subscribe to a sofa for example, you must pay a monthly fee for two years and when the contract is done, you return the sofa and can subscribe to a new one for a discounted rate.
Also, a furniture rental subscription service is not dramatically cheaper than buying furniture.
For example, a specific table from Munito is priced at 2,060,000 won ($1,706), according to its official website. At Megong, it costs 87,000 won per month for two years to borrow the same table, meaning by the time your contract is up you've paid a total of 2,080,000 won.
The price does drop by 20,000 won from the total amount when the monthly fee is paid by a specific credit card, and when the two-year subscription period ends and the customer starts subscribing to different furniture, a 20-percent discount is given on monthly fees.
It still doesn't seem like the most cost-effective method but considering how well these furniture subscription services have been received by customers in their 20s and 30s, there are clearly benefits.
This business model first took root overseas.
Of all the similar service providers, Feather, launched in 2017 in New York, is the most famous. After the advent of Feather, other start-ups specializing in furniture rental subscriptions such as Fernish and Brook Furniture jumped on the bandwagon.
Their target customers are young people who often relocate in cities with high housing costs.
According to Feather’s recent survey, New Yorkers move homes every 1.6 years on average.
For people who live like nomads, having a lot of furniture is a hassle. Bringing it along to their new homes often incurs high moving costs, and that's only if it fits and is suitable.
Often times a carefully selected, expensive armchair or coffee table is put up for sale at a heavily marked down price, a lengthy and stressful process, or is thrown away.
In addition, many people find their preferences for furniture changes with time, or they want to keep up with the home décor trends and decorate their places in the style of the moment.
It is these kinds of people that furniture rental subscription start-ups target.
Megong has been in the market only for three months but it already has 5,000 members with about 400 contracts.
“Single households that move frequently or newlyweds in early 30s are our main customers,” said Kim Nam-seok, the CEO of Megong. “They opt for this service because they like to use different styles of furniture,” Kim added.
Similar services are on offer by other local companies.
Hyundai Rental Care offers mattresses along with bed frames, and it saw an increase of more than 25 percent of new customers between March and May compared to the same period last year.
Local furniture rental subscription services are still in the early stages, but the business model has found its footing overseas.
San Francisco-based furniture rental CasaOne attracted $16 million of investment in 2019 alone.
These furniture rental subscription providers are immune to the outbreak of coronavirus with more homebound customers coming in to borrow office furniture.
Los Angeles-based Fernish said it saw a whopping 300-percent increase in orders from home office furniture in mid-March since its inception in 2017.
Ikea, often dubbed as the furniture giant, keeps an eye on the furniture rental subscription market, too. It publicly stated in February that it would advance into the market as a way to make the best use of abandoned furniture such as beds, desks and sofas.
Ikea said it would try different rental subscription models across 30 countries by the end of this year and will re-use furniture as much as it can through the rental subscription service.
“There is this ongoing trend that furniture is consumed fast like fast fashion,” said Lee Jun-young, the head at Consumer Research Center at Sangmyung University.
“There will be growing demand [among people] for furniture rental subscriptions because people want to replace their furniture by keeping up to pace with their changing lifestyles.
“With more people preferring to get access to what they need through a subscription service rather than possessing the actual items, subscription services will expand into other areas such as housing or vehicles. Economically, this service seems to be more of a loss but it will attract the attention of customers by giving them a great sense of satisfaction,” Kim added.
Lee Hyang-eun, a professor of the department of service and design engineering at Sungshin Women’s University, approaches the popularity of subscription services among young generations from a different point of view.
“This generation wants to enjoy many different things but they can’t afford to. What they eventually do is split the money they have and get access to services they can’t possess [through a subscription service].
“Instead of owning actual products, they simply buy rights [to get access to services they need] and try to improve the quality of their life with fewer expenses,” Lee added.
BY YOO JI-YOEN [firstname.lastname@example.org]