Re­fur­bish­ing gets a new high in In­dia

The DQWeek (Kolkata) - - EDIT - Au­thored by SOUMITRA GUPTA, Founder and CEO, To­go­fogo.com For complete story visit: www.dqweek.com

The re­fur­bished mar­ket is the most fea­si­ble so­lu­tion for cus­tomers who dream of high-end prod­ucts but can­not af­ford them. For ex­am­ple, imag­inea Moto X at ` 12274 with 6 months war­ranty. Sim­i­lar deals are avail­able on lead­ing brands like theiPhone, Mi4i, Asus Zen­fone, HTC De­sire, Sam­sung Galaxy, Sam­sung Note 4 or any trend­ing de­vice at prices that can’t be matched, along with war­ranty. Sounds too good to be true but such of­fers ex­ist and are all the rage in the mar­ket. How­ever, there is a catch! These de­vices have been re­fur­bished and at first glance, it is dif­fi­cult to iden­tify or dif­fer­en­ti­ate a brand new prod­uct from a re­fur­bished one. Wel­come to the world of re­fur­bished elec­tron­ics where old is al­most as good as new, and def­i­nitely less ex­pen­sive.

The term ‘Re­fur­bished Mar­ket’ sounds new to the ears, but in re­al­ity it is just a fancieroran ap­peal­ing name for the sec­ond­hand mar­ket, which has ex­isted in the In­dian sub­con­ti­nent for years now. Gizmo geeks of all ages, aspir­ing for equip­ment like ra­dios, tape recorders, DVD play­ers and Desk top com­put­ers, have for­ever been ob­served flock­ing at lo­cal re­pair shops bar­gain­ing for pre-owned prod­ucts re­stricted by their bud­getary con­straints. The bur­geon­ing e-com­merce in­dus­try has been quick to tap this sec­ond-hand mar­ket lead­ing to on­line por­tals like Quickr and OLX achiev­ing a cult sta­tus, where prod­ucts are be­ing bought and sold with­out any war­ranty, guar­an­tee or mend­ing and sur­pris­ingly are still do­ing great. Peo­ple have re­lied upon this mar­ket for years, which is now twice the size of the e-com­merce mar­ket in the coun­try.

With this as the back­drop, to­day the re­fur­bished elec­tron­ics mar­ket is be­ing looked at as a flour­ish­ing cat­e­gory that has emerged be­tween the brand new and sec­ond-hand prod­uct mar­kets. Its emer­gence is great news for peo­ple with as­pi­ra­tions, as the prod­ucts are as good as new, and come with war­ranty too.

This rapidly grow­ing mar­ket is worth $ 15 Bil­lion and works on a highly scal­able busi­ness model. Thriv­ing on its grow­ing rep­u­ta­tion, the dy­namic re­fur­bished elec­tron­ics mar­ket has borne the re­spon­si­bil­ity of reg­u­lar­iz­ing and stan­dard­iz­ing the seg­ment, ac­quir­ing new cus­tomers and earn­ing their faith.Elim­i­nat­ing the un­cer­tain­ties of the un­or­ga­nized lo­cal sec­ond-hand mar­ket in In­dia, the play­ers in the re­fur­bished elec­tron­ics mar­ket are of­fer­ing high qual­ity, gen­uine, branded prod­ucts, at highly dis­counted prices, backed by their world class war­ranty and af­ter-sales-ser­vice. These play­ers have rig­or­ous in­spec­tion pro­cesses in place to check the prod­ucts for ap­proval which are then given the com­pany seal for sale. Most of these play­ers also com­ply by the e-waste reg­u­la­tions that not only serve the buy­ers but also the en­vi­ron­ment. They use glob­ally rec­og­nized stan­dards en­sur­ing high­est stan­dards of prod­uct safety.

Buoyed by its cost ef­fec­tive model and cri­te­ria of pro­cess­ing prod­ucts for sale, the re­fur­bished mo­bile-only mar­ket size is ex­pected to reach USD 14 bil­lion glob­ally by 2017, ac­cord­ing to Gart­ner Re­search. The In­dia mar­ket in this cat­e­gory is con­se­quently ex­pected to reach USD 3 Bil­lion by 2017. Adding to the in­sights are the statis­tics un­der­lined by var­i­ous re­searches. They in­di­cate that in the year 2020, e-com­merce in In­dia is pro­jected to reach $115 Bil­lion and an­tic­i­pates the re­turn rates to be be­tween 10%-15%. This re­turn rate im­plies that prod­ucts worth over $12- $17 Bil­lion will be re­tuned ev­ery year. With e-com­merce be­ing the fastest grow­ing seg­ment in the coun­try, the cur­rent re­turn rates are 12% - 15%, which is in-line with the re­turn rates in de­vel­oped coun­tries. To be spe­cific, it is the clos­est to theUS e-com­merce re­turn rates, which is be­tween 10%-15%.

In present day In­dia, e-com­merce is slowly be­ing di­ver­si­fied to an­other cat­e­gory called re-com­merce sus­tained and run by the re­fur­bished prod­ucts trade and is a flour­ish­ing busi­ness. Apart from the white goods, the IT hard­ware and mo­bil­ity de­vices mar­ket is worth a whop­ping USD 5 Bil­lion and grow­ing at a VCAGR rate of 25-30% an­nu­ally. The draw­back in the seg­ment is the ab­sence of a na­tional re­fur­bish­ing author­ity or body and the­fact that the en­tire mar­ket is frag­mented and un­or­ga­nized. Adding to the teething trou­bles are the e-com­merce web­sites sell­ing sec­ond­hand prod­ucts.

To put things in to per­spec­tive, un­der­stand­ing the global sce­nario is of great sig­nif­i­cance. The de­vel­oped na­tions of the world have iden­ti­fied and un­der­stood the pos­i­tives of the seg­ment and pro­mote it along with var­i­ous gov­ern­ment en­ti­ties. The best ex­am­ple is the re­fur­bished goods ini­tia­tives taken in the United States, where 26 out of 50 states, man­date public schools and gov­ern­ment in­sti­tu­tions to buy only re­fur­bished prod­ucts thereby re­duc­ing their CAPEX out­flow while si­mul­ta­ne­ously look­ing af­ter the en­vi­ron­ment. It is 25 times more en­vi­ron­ment-friendly to re­fur­bish a prod­uct than scrap­ping.

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