Starting any business is tough, but starting a business that requires a great deal of consumer education? That’s a completely different ball game reserved only for the brave. Not one to shy away from a challenge, Mishaan Ratan, Chris Govender, Aviraag Ramdhani and Avinesh Reddy co-founded a new type of business in South Africa, aimed at providing consumers with access to electronics at a manageable and affordable price. With its subscription-based model, Rentoza was born out of a problem the founders themselves faced: how to access the items they wanted and needed at a price they could afford.
Founded in 2017, Rentoza is now one of the most unique e-commerce retailers in the country. Rather than working with a traditional credit model, like most other businesses in South Africa, Rentoza focuses on individual affordability. By prioritising on an on-demand subscription model rather than being yet another credit provider, this unique retailer speaks to the aspirational consumer profile in the country while helping consumers avoid dangerous debt traps. In short, Rentoza is about letting consumers live life on their own terms.
The platform is indeed an exciting one for consumers and budding entrepreneurs who are looking to following similar models. We spoke to Rentoza co-founder, Mishaan Ratan about the challenges, goals, and future of a subscription business in South Africa:
What inspired you and your business partners to start Rentoza and bring the subscription model to South Africa?
“It was actually a problem we as individuals faced. How do we access the items we want at a price that we could afford and use well pay for the usage of that product without actually owning it? This is where the idea emanated from, solving real problems for ourselves. Then as we explored the solution we realised that this is not unique to us, it is a problem that people face in South Africa daily.
“We have a highly aspirational consumer profile in the country and people want the best, of everything but don’t have access to it. We wanted to create the access. In that process, we’ve developed a platform and product set that speaks to what people really need, and need is important to highlight because it’s not just about wants. A cellphone, washing machine, laptop, these are all essential items that we need in this day and age to live a productive and progressive life, it’s no longer nice to have. At Rentoza, we want to ensure that the people of South Africa have access to the products they need at affordable rates and flexible terms so that they can prosper.”
Rentoza started as a rental marketplace for ‘lazy assets’. When did the model pivot to subscription & products offered by Rentoza?
“Yes, we did start as a marketplace, and it worked on a small scale but we soon realised that if we wanted to achieve what we set out to; to let people live life on their own terms, we had to be more of a guiding force in the value chain. The marketplace allowed for people to connect to each other and find what they needed, and we just facilitated that of course, but we soon realised we needed massive scale to really impact the market. You need a lot of product supplied by the public to meet the demand. And the complexity around logistics, insurance and payments just didn’t make sense. We really wanted to simplify the experience for customers, and we continue to evolve the customer experience as we grow.
“So, with that in mind, we took the leap to change the model and move to a subscription-based model to ensure anyone that needed anything could find it and get it in their hands. We supply all the products on the platform at the click of a button to all customers. Thus avoiding the hit and miss scenarios that we were experiencing initially. This also allows us to be the main point of communication and customers can deal with everything they need seamlessly through us.”
What was the biggest challenge starting out, and how did you raise the funds to start?
“The biggest challenge, and one which I think is something that we’ll continue to work towards, is changing the mindset of South Africans from ownership to access. Owning things is engrained in our psyche. We have an inherent need to extend ourselves beyond what we can afford to try and have the best in the short term at the cost of long term prosperity. We want to let South Africa know, you can still have the best and not run yourself into debt and all sorts of trouble.
“As for funding; like all entrepreneurs who believe in their vision and the ability for it to impact the world, we put our own money behind our vision and dream. We bootstrapped this business from the start, and we are at a point now where we are looking for solid funding to expand, grow and accelerate the growth of the business.”
What sets Rentoza apart from competitors in the market or similar businesses such as Teljoy?
“We’re completely different. First, I think it’s vital to mention, we don’t work with a traditional credit model as all other businesses do — we work with individual affordability. We also have flexible terms, 6 and 12 months for anything on our site, allowing people different price points for the item, so it’s really up to them what they can afford monthly.
“But I think what really stands us apart is, We are pureplay subscription. So you subscribe to an item and utilise it, at the end of your term you return the items, and we give you the next best and latest item, and you continue your subscription. If you come into any financial difficulty during your subscription, simply let us know and return the item, with no penalty at all.”
What products have been most popular with Rentoza subscribers?
“Consumer electronics, of course — it’s all about connectivity. Cell phones, laptops, tablets, desktops and also a very big vertical for us is gaming consoles and computers for gaming. It’s seeing tremendous growth month on month.”
Have you seen a shift in consumer behaviour to embracing the subscription-based model as an alternative to buying on a credit or buying outright?
“We have a growing customer base that hasn’t slowed since we started, so I would say yes, people are starting to understand, and we believe, starting to change the way they look at product ownership.”
What trends are we likely to see in the subscription space in the future?
“I think we will see a lot more subscription models being developed in the short term, whether it be service or product, which is great because globally subscription models are really built for consumers and not just for business benefit. Once we start creating more of these models and people gravitate towards it, I think it will change the way people interact with all kinds of items and services in their lives.”
What would you like to see for the future of Rentoza?
“Of course, to be the largest e-commerce retailer in the country one day. But with a very focused offering. The best place to get what you need when it comes to consumer electronics and appliances.”
Get started now:
Keen to join the subscription trend? Using Rentoza is simple and easy. Search the Rentoza website for the latest devices and appliances from leading global brands. Once you’ve found an item you want, choose a subscription term for the selected product, and then activate your subscription by capturing your debit or credit card details for their first monthly payment via Rentoza’s secure gateway. The product is then delivered to your door within 72 hours at no extra cost. Going forward, you are billed automatically on the same day you activated your subscription every month.
To become a subscriber, or for more information, visit Rentoza.co.za.