Recently, Tanworth (探物), a Shenzhen-based digital product rental service platform has raised tens of millions of RMB from Ant Financial, the payment platform affiliate of Chinese e-commerce giant Alibaba, as angel funding. The capital raised would, as revealed by Tanworth, be used in group construction and marketing campaigns, with Ant Financial Service Group’s support in user traffic, supply chain and risk control management.
Founded in March 2016, Tanworth serves as a rental service platform for digital products such as game consoles, sports cameras, drones, SLR cameras and lenses, VR devices, speakers and headphones.
With the rapid development of technological products, the idea of renting rather than purchasing at high cost has become more and more popular among consumers. Tanworth hopes that by providing individuals with a low-cost diversified experience, it can contribute to the introduction of digital products.
Both Tanworth and Ant Financial are supported by Zhima Credit (or Sesame Credit), the online credit scoring service of Alibaba. Costumers are provided with deposit-free service: they can get their products through O2O systems. The platform currently makes profits mainly through charging rents, where swift turnovers could shorten payback period.
Regarding the range of products, Tanworth prefers two kinds of items: firstly, sought-after ones which cost between 2,000-5,000 yuan (approximately 300-700 US dollars), and secondly, those of high qualities.
According to CEO Li Hong, the reason why Tanworth prefers the first kind of products is that they are within the purchasing power of most consumers. Items costing more than 5,000 yuan are more popular with professional users, while what Tanworth targets is the mass market. The name “Tanworth” comes from the phrase “Looking for good things”, “tan” means “seeking” in Chinese. Although products being rented on the platform are sourced, Tanworth is trying to develop a positive atmosphere where people are eager to “tan”.
There are two types of rental services available: users can rent products short-term on a “scenario-basis”, or on a long-term basis. Rental fees are set accordingly: average rental fee per day is reduced with increasing length of rental.
For rental service platforms like Tanworth, customers contribute greatly to the value of the platform. In its efforts to retain customers, Tanworth is very creative. For example, there are weekly reviews by PGC, compilation of technology-related videos from foreign websites, platform for the sharing, and retaining of UGC which can foster interaction.
The way the platform works for users is starting with the process of discovery, on-line order and off-line pickup. As for cyber services, the platform is enveloped with Alipay, Mini Program, APP and its official website. Tanworth has established offline experience spots in Shenzhen, Wuhan, Hangzhou, Xiamen and Beijing, among others. Tanworth has found out that users are still enthusiastic about live experience. Users require aid in teaching them how to use the items. Due to the executional precision of the products, users require physical lessons.
Apart from renting to consumers, by starting partnership with various businesses, Tanworth provides rental space for merchants. Web user traffic can provide more value-added services for them.
As Li Hong said, Tanworth keeps putting emphasis on risk-control, supply chain, service quality, and capital resource while developing as a rental platform. It necessitates back-end processing and risk controlling ability to avoid contractual risk and price drops.
Tanworth does its business partly in conjunction with brand distributors, purchasing products from them directly, then renting it out on its platform.. On the downstream end of the supply chain, goods are sold off at its residual value at flea markets..
Supported by Zhima Credit, the risk-control system offers users a deposit-free plan of different levels according to their Zhima points and performance evaluation. Concurrently, Tanworth is cooperating with other third parties such as Risk Management service provider Tongdun Technology, endeavoring in recognizing and avoiding potential risks and establishing data base.
According to Tanworth’s data, the salvage value of a GoPro after one year is around 60%, with a turnover of 2.1 times per month and a payback period of 2.7 months. It now has 6 physical stores with over 200 SKU.
Writer: GAO Ge
Greg Martin of The Praxis Company on gamifying financial education: Startup StoriesGreg Martin of The Praxis Company on gamifying financial education: Startup Stories
How Instagram is shaking up Southeast Asia’s tourism industryHow Instagram is shaking up Southeast Asia’s tourism industry
Tencent-backed Kuaishou becomes third major short-video app to allow longer contentTencent-backed Kuaishou becomes third major short-video app to allow longer content
Chinese tech giants including Alibaba and Tencent collaborate on alert system to find missing childrenChinese tech giants including Alibaba and Tencent collaborate on alert system to find missing children
Tiki’s chief business officer on winning Vietnamese e-commerce consumersTiki’s chief business officer on winning Vietnamese e-commerce consumers