Refurbished Goods industry progressing rapidly

The IT Refurbished goods segment is not only the fastest moving but also one where the returns are higher as compared to other segments, said Rahul Chowdhury CEO & Co-founder and Anand Tater Founder & Director of Reboot Systems India  during an exclusive conversation with Retailer Media…

Tell us about the inception of your brand?

Rahul: We launched Reboot in October 2012 as India’s first national IT goods Refurbisher with the objective of bridging the digital divide using global best practices for refurbishing. This idea was softly seeded in its original avatar in 2010 by the company’s Co-Founders Anand Tater and Rishabh Tater owing to their passion for bringing technology to the masses at an affordable price point.

 The company’s third co-Founder AngshumanSaha, who is Anand’s childhood friend, believed in their vision and came on-board to help them convert it into a reality. I met Anand via common friends and as an angel investor to hear their idea and while talking about the issue of digital divide and the immense potential of refurbishing, we realized that if we joined hands we can make a massive impact in the marketplace. A couple of months of hectic meetings, data mapping and market research with my analytic’s and sales background gave birth to this frugal innovation business model.

What made you venture into this segment? We would like to know more about the business model.

Anand: The PC penetration in India is sub 10~11% which is lower than Sri Lanka and even Pakistan and far behind China and other developed nations. While the Government is aggressively campaigning for a Digital and a Skilled India, these dreams can’t become a reality if the PC-Learning Device penetration does not happen at the grassroots level areas.

 Our third maximum import spend or FDI bill is on hardware imports and despite this, a large section of the population does not have access to technology. Refurbishment is the only solution that would help us in making optimum use of the IT assets already available in the country. It is a globally recognized phenomenon which has been largely ignored in our country so far. Seeing the immense potential, we decided to venture into this untapped segment and became the first national level company in the IT goods refurbishment category. 

Rahul: We have established state level zonal partners who are responsible for setting up a minimum of 7 Experience Zones/Centres in their state within two years. These experience Centers/zones have been established as touch points where consumers can come and see what a Reboot refurbished product looks like and how different it is from a second hand product. Currently on the product side we offer Laptops, Desktops, PC Peripherals and Mobility Devices like Smartphones and Tablets (iPhones and iPads only currently). Gradually, we plan to offer all chip-based products which are less than 7kg in weight apart from Servers.

Anand:Our focus, for both buying and selling products, has so far largely been on the B2B space right from large corporates to SMEs to NGOs and institutions. We evaluate IT assets of an organization and buy them at highly competitive rates based on certain algorithms. The end-of-life assets are recycled in a responsible manner as we are an e-waste certified company. The in-life assets are refurbished to create ‘just like new’ boxed products which are sold to consumers, both institutional and individual, with a one year replaceable warranty. Our range of services for the corporates include IT Asset Disposition, Certified Data Sanitation and Refurbishment as a Service (RaaS) as a CSR option for corporates.

Rahul:Now, we have decided to become more aggressive in the B2C space as well. We have developed a frugal omni-channel model wherein we are not only rapidly expanding our retail network across the country but have also launched our online store ‘therebootstore.com’ and have partnered with e-commerce websites like Surpluss and Junglee so as to ensure more and more consumers can take advantage of a like-new product at a very affordable price point and with a national warranty.

Who according to you are your target consumers and how do you reach out to them?

Rahul: Anybody who is either looking to dispose off their IT/Chip based assets or want to buy an ‘as good as new’ asset at an affordable price is our consumer. 60% of our business today comes from educational institutions. We are now looking at increasing our consumer base in the retail segment as well.

Anand:We have over 18 experience centers currently across 9 states and we are opening 2-3 stores each month. Our zonal partners are the biggest strength of our business. They are the ones who are not only responsible for setting up Reboot Experience Centres and Zones in their state but also for reaching out to the major IT asset holders as well as buyers in their respective states to educate them about the cost-effective and eco-friendly option available to them in the form of Reboot services and products. Our online store and partner e-commerce platforms are also effective ways of reaching out to the consumers.

How do you assure Asset/Returns Management Services for E-Commerce firms?

Rahul:We look at this space with rather new more innovative solutions as compared to the traditional reverse logistic partnership particularly in the IT products and devices segment. The segment is not only the fastest moving but also one where the returns are higher as compared to other segments. We look at providing asset identification, claim verification, performance + component evaluation, market valuation and re-marketing. On top of this, certain product segments can get add-on refurbishing thus adding significant value (at times over 2 to 3X value impact) to a returned product. These are services that we are on the verge of launching. We are currently in talks with several large e-commerce companies to become their partners for setting up and operating their Returns processing centres nationally in order to manage the returned assets with the right speed, quality checks and buy back algorithms and data wipes.

What are your expansion plans for this fiscal?

Rahul:From 1st October onwards, we have become aggressive in our endeavors to tap individual consumers. We plan to increase our store count to 70 by March 2016. We are also on the verge of conducting a pilot for buying used IT assets from individuals. Based on the success of the pilot, we will go whole hog in that space. In terms of products, we will be introducing fitness tracking devises and gaming consoles within the next couple of months. While currently we only offer Apple phones and tablets under our mobility devices product line, we will be introducing a couple of more leading brands in this category. Moreover, we will be partnering with some leading e-commerce companies for asset returns management services.

Anand: We are also conducting a pilot of our Rural Empowerment & Business Optimizer (REBO) programme and will soon be launching it nationally. REBO is an ambitious project wherein we are looking at addressing the country’s need for skilled workforce by creating 10,000 Reboot certified entrepreneurs who will be equipped to buy, sell and maintain IT assets on behalf of Reboot in remote areas using our REBO Mobile App. Our Dealer Procurement Mobile App is also in the development stage.      

How do you think your portal will bring a change in this segment?

Anand:While we are fast expanding our retail presence, it will take some time for our physical stores to be available across the entire country. Our portal will be helpful for all those who are looking at buying a refurbished e-product at an affordable price with a national warranty. These are people who are used to seeing unboxed products under the refurbished categories on various websites. Now, they can experience the feeling of buying a product which looks and functions like new and comes in a branded sealed box. We are also on the verge of introducing an EMI mode of payment on our e-store which will make buying our products even easier for the masses or non-early adopters of technology products.

What are your views about this industry?

Rahul: Technology from being "5 Years out" has come to "5 Month out" for someand yet for a large part of our population it is still 5 years away from financial and accessibility point of view.We see the industry, which till date had largely been dominated by grey market / trading platforms with little or no responsibly towards its patrons, now shaping up. These are very early days. With awareness and global concepts becoming local, the consumers are now beginning to ask critical questions about the value, the green effect and most importantly service / warranty about the products that they buy.

From a Demand perspective, with large focus on Digital India and global IT leaders pledging support, the market for refurbished products (as low cost high value enablers) will unlock to a very large number. Some industry experts put the market size around $2 Billion+, at Reboot we believe it is too early to cap the market at any value.

From an Industry perspective, there is going to be lot of chaos in the segment with anyone who is selling factory seconds or defective unboxed products at discounted rates calling himself a Refurbisher. I firmly believe that there is no IT Refurbisher in India except Reboot. There are not many who do a 16 point check to identify the problems in a product and then work towards correcting each defect. Each Reboot product is cosmetically and functionally as good as new and comes in a brand new box with original software in place. Our confidence about our products is reflected in the fact that we offer a 1 year replaceable warranty on all our products with the option of taking a 2 or 3 year extended protection plan. We are a Microsoft registered Refurbisher and can install the original Microsoft OS on any PC that we sell to an educational institution or an NGO. Unfortunately, in a country where there are just 16 computers per 1000 people, we need at least 10 more Reboot like companies to be able to make a difference.