Greendust, started by Hitendra Chaturvedi, is a company that picks up returned shipments for eCommerce players and Original Equipment Manufacturers (OEMs). The business model of the company Reverse Logistics Co. (RLC) is simple. The rejected or defected pieces are moved for refurbishing and sold as factory seconds through their brand, Greendust.
The company was started in 2008 by Chaturvedi, who was sent to India to head Microsoft’s OEM division, after having completed his MBA from SMU Cox School in Dallas, Texas and worked for Ernst and Young, AT Kearney and Newsgistics. After 16 years in the US, including a two-year stint with Texas-based Newsgistics where he learned the ropes of the reverse logistics concept, Chaturvedi had an epiphany. The epiphany was later named Greendust.
The shift to sell second-hand goods
Greendust is India’s largest retailer of refurbished goods today. Last year, the company targeted revenues of Rs 1,200 crore. Apart from the existing bouquet of consumer electronics and durables sourced from large OEMs such as LG, Samsung, Panasonic, Whirlpool and many more, and e-marketplace operators such as Flipkart, Amazon, Snapdeal and eBay by handling their returned goods, Greendust now is expanding its product category and entering the sale of second-hand electronics and white goods, and may be even cars.
Why Greendust is chasing the second-hand?
A report released by the Associated Chamber of Commerce and Industry of India pegged the market for second-hand and recycled products in India at Rs 80,000 crore in 2014, up from Rs 69,000 crore two years back. The report further estimated that the market would cross Rs 1,15,000 crore last year. The market has recorded a growth of 15 percent per annum.
According to experts, the average return rate for eCommerce in India is 30 per cent. That means for every 500 products sold online, 150 products will be returned. And going by the estimates of NASSCOM – ‘eCommerce is scaling to reach a $100 billion industry by 2020’ – means that the industry will have returns worth $30 billion.
Today a host of companies are beginning to chase the second-hand goods market, including OLX, eBay, Snapdeal (Shopo), ShopClues, CarDekho, CarTrade and so on. A sure sign that sales are booming, the online space has not only revolutionised the way second-hand products are transacted but evolved its self to meet the skyrocketing demands.