YCloset

About YCloset

YCloset, founded in 2015 by CEO Liu Mengyuan, operated as a high-profile fashion rental platform based in Beijing, China. Liu, with over a decade of experience in the fashion industry, identified a key market inefficiency: women often feel they have nothing to wear despite full closets, leading to wasteful purchasing. This insight drove the creation of a platform designed to offer an affordable and sustainable alternative to fast fashion, targeting female consumers with a desire for variety.

The company's business model was centered on a monthly subscription service. For a recurring fee of 499 yuan (approximately $77), users gained access to an extensive online wardrobe of apparel and accessories. This subscription allowed for the unlimited rental of items, typically sent out in batches of three to five pieces, with all delivery and dry-cleaning costs included. Revenue was primarily generated from these membership fees, which accounted for about 75% of income, while the remaining 25% came from users purchasing the rented items they liked. The platform featured a diverse range of over 500 brands, from designer labels to affordable luxury, shifting from direct purchasing to brand partnerships and revenue-sharing models over time.

YCloset established a significant logistical infrastructure to support its operations, including large-scale, self-operated centers in major Chinese cities for storage, cleaning, and distribution. It integrated RFID tracking technology to manage inventory and streamline the cleaning process, partnering with established laundry services like Fornet to maintain quality. The company attracted substantial investor interest, securing a total of $70 million over six financing rounds from prominent investors such as Alibaba, SoftBank China, Sequoia China, and IDG Capital. At its peak, the platform claimed to have reached 20 million users.

Despite its initial success and significant backing, YCloset faced insurmountable challenges. The business model proved to be capital-intensive, with high operational costs in logistics, shipping, and dry cleaning straining its finances. In July 2021, the company announced it was ceasing operations, officially shutting down its app, website, and all services on August 15, 2021, marking the end of its five-year run in the competitive sharing economy.