Refurbishing gets a new high in India
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.