A year ago, Indonesia-based Fanny Novia and Anthony Huang were like any other happy couple who were gearing up for the birth of their first child by stocking up on baby essentials, toys, and nursery items. But fate seemed to have decreed otherwise. The couple’s baby girl was born with a genetic disorder and died one month after her birth.
Their loss was unimaginable, but in time, they came to terms with it. But what was left of the big moment in their lives were those brand new toys and baby essentials which they had so painstakingly collected, now of no use to them. They decided to rent out these unused items to other parents in need who wanted affordable things for one-time use.
Having gone through the joyous process of being a parent and the challenging process of motherhood, the couple decided to ease these worries for other parents in the making so that they could enjoy their big moment without having to worry about money. Thus, TinyToes was born – a web-based ecommerce platform for renting baby essentials, toys, and nursery items for expecting mothers and parents-to-be.
Launched in late September 2016, TinyToes aims to fill in market demand for high-quality, premium baby essentials, toys, and nursery needs. It makes fiscal sense to rent these items rather than buying them.
Says Fanny, “We understand that being a parent, especially motherhood, are challenging and tough. Through Tiny Toes, we would like to ease parents’ worries, whereby they could enjoy high-quality baby gears/essentials for their little ones without having to spend much by buying it outright. Instead they could just rent from us.”
Tiny Steps Towards Renting For Baby’s Needs
For parents wishing to rent baby essentials, they can browse for them on the platform, click on the product they would like to rent, choose the rental period (ranging from 1 week to 4 months), and check availability period from the reservation calendar. If the product is available for the requisite time, they can book the date, sign in and proceed to payment. Post the receipt of payment, the products are delivered to the customer’s premise on the delivery date. Once the rental period is over, the same are duly collected back.
The product basket comprises baby essentials, such as toys, swings, rockers, crib, bath products; maternity essentials; and travel essentials like car seat, stroller, etc. The startup procures these products directly from authorised distributors in Indonesia and mostly from prominent brands like Mothercare, Fisher-Price, Bright Star, Mamas Papas, Inglesina, etc.
Given the fact that quality and hygiene of products is a big factor, TinyToes makes sure that it procures only new products from authorised distributors for each brand. More so, every product, after its rental period, is cleaned thoroughly using a steam cleaner and baby-friendly cleanser to ready it for further use.
The Indonesian Market Vis-A-Vis Renting
The startup’s main target audience are young parents who live in metropolitan city with high living costs. These would form the ideal set who would relate to the philosophy of minimising permanent spending for one-time use products. The fact that rental charges at TinyToes are around 10% to 20% of the retail price of the product, are a big pull factor for this audience.
Hence, TinyToes’ focus on reaching out to the urban young married couple who have baby/children below 5 years of age, as well as expecting mothers located in Jakarta and surrounding areas. Currently, it is reaching out to this tech-savvy crowd through social media platforms, i.e. Instagram, Facebook, Line, and through social influencers/buzzers.
But are Indonesians ready to rent?
Fanny believes they are. She explains, “In a metropolitan city like Jakarta, especially young parents are mostly tech-savvy and they are more or less familiar with the concept of baby/maternity essentials rental. The demand is huge and we do not really need to educate the market since these kind of rental services are already available, but most are still offline and not integrated like on our platform.”
She, however, states that the main challenge is that their inventories are not growing as fast as the growing demand. She adds that they have received a lot of queries from their customers to add more products and variants.
200+ Customers And TinyToes’ Big Plans
Ever since the startup launched on 24 September this year, orders have steadily piled in. In less than two months, over 210 unique orders with a total revenue of IDR 35 Mn ($2,700) have been claimed to be processed by the platform and they keep growing. TinyToes now counts 200 unique customers registered on its platform.
Fanny significantly remembers the day after the launch when orders started trickling in. She says, “Frankly speaking, we didn’t expect that we will get any order within the first one or two weeks from our launch, and it would be mainly a marketing effort. However, it turned out that we received 5 orders on the day after the launch date and the number is growing steadily each day.”
The core team consists of Anthony and Fanny and a full-time hire to take care of admin/ customer service matters. The office and warehouse is located inside Fanny’s existing logistics business premise in Jakarta.
As of now, TinyToes is completely bootstrapped with the founders ploughing an initial seed capital of IDR 300 Mn ($23K). For the future, it might want to raise funds to support its horizontal and vertical growth plans. Anthony explains, “We plan to add more variants of products & inventories, and open warehouses in other big cities in Indonesia, such as Medan, Bandung, Surabaya. Currently, all inventories for rent belong to us. In order to grow vertically, we plan to expand the platform to become a marketplace for rentals where other players can similarly rent their products to consumers.”
While TinyToes’ plans are big, Anthony knows that there is no dearth of competition. From similar baby essentials rental services in Jakarta, both offline and online platforms such as Babyloania, to retail stores who sell baby essentials to ecommerce platforms like Lazada, the competition is huge. Ultimately it will boil down to the users for whom renting makes more economic sense than buying.
But Anthony believes that the one outcome of the tough competition is that the startup has to spend less time in educating the market for these products. Apart from the integrated order-reservation platform, TinyToes also stands to leverage from the founder’s existing logistic business resources, thus controlling and lowering the shipping costs incurred during the delivery & pick up of products.
Indonesia is a young-populated nation and the economy is emerging. The major players in Indonesia’s ecommerce segment include Tokopedia, Matahari Mall, Lazada, Qoo10, and OLX and the market is expected to hit $130Bn by 2020. Also, with the global increase in smartphone usage, the country’s mobile first economy offers elevated opportunities for growth. Data shows that 64% of Indonesia’s 100 Mn internet users prefer prefer mobile over desktops for shopping.
Thus, the opportunity is huge for startups to experiment and develop new business models on mobile, primarily driven by commerce, to the increasing mass of tech savvy consumers. But how comfortable will consumers be in renting products vis-à-vis buying them outright from bigger ecommerce players is the challenge that rental startups like TinyToes will face as they try to gain some ground in a country which will play a huge part Asia’s ecommerce ecosystem.