Please read the case carefully and answer the following questions with reference to the case.

Rent Now Case

RentNow is a rental platform that lists household items for rent and offers a platform connecting renters with vendors (the lenders). Items range from electronics like refrigerators, washing machines, and air-conditioners, to furniture like sofa sets, beds, and cupboards. Users can see the listings of products rented out by vendors near their current locations. The vendors require paying a monthly fee to have their listings on the RentNow website. The vendors take care of the delivery.

RentNow has recruited employees across towns and cities to visit local stores and convince owners to register on RentNow. When RentNow enters the market of a new city, it gives offers like ‘the first three months of free trial’ to the store owners. This has helped in making more stores register under RentNow. RentNow website also has advertisements from external advertisers, which is a major part of their revenue source.

A new competitor, BorrowKaro, enters the market with the same offerings as RentNow. However, to capture the market, BorrowKaro allows shops to provide their listings free of charge. BorrowKaro intends to have advertisements as their primary source of revenue. Since RentNow has already introduced local shops and services to the platform’s advantage, it is easy for BorrowKaro to make vendors provide their listings on its website.

To compete with BorrowKaro, RentNow plans to expand its services by providing shop listings, as well. For example, a local furniture shop can include can subscribe to RentNow as a local store and customers will get the shop information, contact, and location, in case they wanted to visit the store themselves. This way, there are greater chances of shops registering for RentNow as it is also serving as an advertisement. The shops may request RentNow’s local employees to help with the photographs taken and uploaded on RentNow.

1. Explain the Elements of RentNow’s original business model.
2. Compare this with the changes in the new business model when RentNow plans to expand.