Yi23

About Yi23

Yi Er San (衣二三), operating internationally as YCloset, was a significant player in China's clothing rental market, founded in 2015 by CEO Liu Mengyuan and co-founder Wang Chen. Liu, a former fashion media professional with experience at BAZAAR TV, aimed to solve the perennial problem of women feeling they have nothing to wear. Her media background provided the fashion industry insight, while Wang, who previously worked in private equity at KKR and as an investor at IDG Capital, brought financial and operational expertise to the venture.

The company targeted urban professional women, offering a subscription-based service for renting everyday apparel. For a monthly fee, initially around 499 RMB, members could rent a selection of clothes, typically three to five items at a time, with unlimited exchanges. This model provided customers with a rotating wardrobe featuring items from a wide array of brands, including designer, commercial, and luxury labels. The service also included an option for users to purchase items they liked at a discount, a model described as "try before you buy" or "rent-to-retail".

Yi Er San's business model was operationally intensive. The company managed its own logistics, including warehousing and cleaning, to control the user experience. It established several intelligent operations centers that integrated warehousing, washing, and distribution, utilizing technologies like RFID tracking to manage its inventory of over a million garments. Initially, the company purchased all its clothing inventory. It later shifted to a platform model, partnering with brands to feature their items on the platform and sharing the rental and sales revenue. This shift allowed for a greater variety of styles and reduced capital expenditure.

The startup attracted substantial venture capital, completing multiple funding rounds with backing from prominent investors like Alibaba, SoftBank China, Sequoia China, and IDG Capital. At its peak, the platform boasted over 15 million registered users. However, despite its initial success and significant funding, Yi Er San faced challenges inherent in the capital-intensive, high-operational-cost clothing rental sector. The company ceased operations and shut down its service on August 15, 2021, after facing financial difficulties and a shifting market landscape.