Delhi-NCR is known to be the hub for purchasing electronic items. You must have heard people saying ‘I got a branded product at a very low price from Delhi.’ Many of such gadget aficionados, bounded with monetary concerns, will be found exploring the local second-hand markets such as Nehru Place or Gafar Market in Delhi since ages. Operating under the umbrella of unorganised retailing, such local electronics markets have successfully fulfilled the needs of consumers.
When we talk about retailing, digitisation is considered to be an integral part now. Betting on the dawn of eCommerce in the country, online portals for second hand products such as OLX and Quickr have become a prominent destination for online buying and selling of second-hand products. Such portals have also seen a tremendous drift in consumer adaption that has made it to be twice the size of current eCommerce industry. These online marketplaces for second-hand products have a bigger concern too. Products on such portals are bought and sold without any guarantee or warranty that further leads to several bad experiences. The above mentioned factor gave birth to a new industry which is known by the name of REFURBISHED. The only difference is products here are as good as new and come with the seller's warranty coupled with a minimum of 6 months manufacturer warranty on Box Opened & Brand Refurbished. Cherry on the cake is the emerging category of Certified Pre-Owned products, which comes with seller’s warranty instead of manufacturer’s warranty. Commenting on fast growing refurbished industry, Hitendra Chaturvedi, Founder & CEO, GreenDust said, “The ambition level of present day users is growing, especially the ones hailing from tier II and III markets. They are more aware now about the top brands and wish to own the latest smartphones and gadgets. The refurbished market, by making the latest products available under a budget, has an amazing scope in these consumer segments.”
Unlocking retail opportunities
The refurbished industry is still at a very nascent stage and in order to gain more credibility the market is working towards regulating the segment by spreading awareness and acquiring more and more customers. Electronics is one of the potential vertical for refurbish items and that fact that technology keeps on evolving and gadgets get outdated within months, refurbished products are surely a sensible purchase decision. “Refurbished business is here to stay and will grow many folds, the issue is not the quantity the issue is quality that everyone should focus on, wholesale players will make some money and would be out of the game once the customers start following one company for their Quality and Trust factor,” said Yuvraj Aman Singh, CEO, Rocking Deals.
The market, primarily, was dominated by unorganised retailers which further evolved to startups such as Greendust and Shopclues. The industry, over the past couple of years, has grown in huge leaps and bounds. While initially there was huge splurge in demand from tier II and III cities, companies are now experiencing hike in demand from metro cities too. Soon after these online startups managed to root their business model in the market, many companies went ahead and forayed into the brick and mortar space to build the offline connect that did helped them to market their brand name. Surely a large chunk of the refurbished market is still untapped and has huge growth potential. Commenting on the same, Ishita Gupta, Co- Founder, Desi Jugaad said, “The shopping pattern of Indian consumer is changing with times and is moving over to quick buys. They like playing around with new products with pockets to suit their budget. So why not invest in a product once and re-create design as per your need using the same piece.”
Franchising as a medium to expand
In order to broaden their horizon, many of these refurbished startups are now aiming to grab the lion’s pie by taking the franchising route. No doubt, franchising enables a brand to onboard a bunch of talent from the industry which further helps in building the business. However, franchising can be a risky alternative for some refurbished entrants as the industry is still on the verge of expansion and market is too bony for such experiment. Contradicting to the above mentioned fact, one of country’s largest online refurbished marketplaces Greendust has injected franchising into their DNA. “The 250 stores that we have are all franchisee stores. Franchisee model works very well here, particularly in tier III & IV city where franchise model can work well in a small 1000 1500 sq ft neighbourhood
India is a country where people prefer buying cheap products but don’t really want the ‘used’ tag to come with it. The refurbished franchise category in India is at a very early stage. Some of these above mentioned companies have begun their franchise operation lately but, will need some time to show sustainable growth with a larger per cent of franchise being profitable. The consumer base is surely increasing and soon we expect the refurbished industry to stand tall as one of the mainstream verticals of the modern day retailing.