Fashion rental subscription service Le Tote has taken a step toward international expansion with the launch of Le Tote China.
Co-founder/CEO Rakesh Tondon says Le Tote is the first outside company to bring e-commerce clothing rentals to China and the first US subscription service to enter the market.
A beta test launched at the end of December has attracted 3000 users, and once the service opens to the general public soon the goal is to reach 50,000 subscribers by the end of the year.
Former executive director of shoe retailer Belle International Clement Tang is partnering Le Tote in China, investing US$10 million in the venture initially then putting in an extra 20 million. He is now Le Tote China CEO.
Tondon says China’s regulatory restrictions are “particularly tough” and the partnership with Tang enables the company to enter a market few venture-backed companies have been able to penetrate.
“With the launch of Le Tote China we are now able to reach a target demographic of more than 400 million women – and we’re still in the early days of the country’s middle-class boom.”
Le Tote took its domestic business model, proprietary technology and in-house talent to transpose the service for the international market. Drawing on talent in the technology hub of Shenzhen, where it is based, Le Tote China grew from concept to beta in just three months.
“China is a nuanced market with its own cultural norms, standards and expectations. We can’t simply cut and paste the Le Tote experience,” says Tang.
Tondon says the approach to China has been mobile first. “We started with a WeChat app … It’s a very dominant platform.”
Le Tote is running branding campaigns on WeChat and using the app’s payment system for all transactions. QR codes will help drive engagement.
There are satellite offices in Beijing and Hong Kong with the distribution centre in Dongguan, with plans to expand to Beijing and Shanghai.
A full launch is expected next month.