How startups are rebooting the refurbished electronics market | The Financial Express

2022-07-31 00:05:39 By : Ms. Sophie Sun

At a time when the fast-growing refurbished electronics space is dominated by the grey market, lacks structure and consumer trust, a new breed of startups and players is addressing customer pain points and changing the game.

These tech-enabled platforms are trying to tap into the potential of the refurbished or used electronics market in India that is already growing at a CAGR of 16% and is expected to be worth $11 billion by FY26, as per a recent report by management consulting firm RedSeer.

The refurbished industry has picked up in India in recent years, but the organised players in the sector are still lacking, said Soumitra Gupta, CEO of Xtracover, a New Delhi-based e-commerce platform for refurbished electronic devices and mobile phones. “I believe this is one of the primary reasons for the lack of trust in customers when it comes to refurbished products,” he added.

Satanik Roy, co-founder and product head of HyperXchange, a Kolkata-based re-commerce marketplace for refurbished electronic gadgets, agrees.

“About 95% of the market is grey. The refurbished electronics market exists globally, across all cities, in the form of small grey-market stores, lacking predictable quality and trust,” he explained.

HyperXchange leverages its proprietary hardware to evaluate and price pre-owned electronics, both at retail and enterprise scale, and also acts as quality control for the refurbishment process. “This removes human oversight and makes the procurement-to-sales cycle globally scalable,” explained Roy, who was named in the Forbes 30 Under 30 India & Asia lists for 2021. He started HyperXchange from his dorm room in 2016 along with co-founders Dipanjan Purkayastha and Asis Chakraborty.

HyperXchange also uses its last-mile franchisees as well as leading online marketplaces to create an infinitely scalable network for procurement and sales, in both offline and online modes.

Meanwhile, Xtracover offers a one-year warranty of the pre-owned certified device sales, alongside easy payment options and pan-India delivery. Its health check certification checks the quality of the devices by doing 64 automated and semi-automated tests. It also generates a certificate uploaded to the cloud to maintain transparency.

Smartphones comprise the bulk of the most in-demand refurbished items. According to a report by RedSeer Consulting, with an increased demand for affordable yet branded smartphones, a new sub-segment of refurbished electronics has emerged — used smartphones. This used smartphone market is also expected to grow and reach $10 billion by FY26, the report said.

“Mobile phones are of the greatest demand in terms of product category followed by laptops, as work from home for adults and study from home for children alike drove up demand for devices like mobiles, tablets and laptops. In terms of brands, people choose Apple,” said Roy of HyperXchange.

For Xtracover, too, Apple products are fan favourites followed by Xiaomi devices. “They form a major chunk of our sales. While iPhones gain maximum traction on our platform, it is followed by Redmi, Realme, Oppo and Oneplus,” said Gupta, adding: “Besides being the more cost-effective solution, the reason behind picking up refurbished devices from our platform is quality assurance. Consumers today aspire to own high-end devices but at reasonable costs, and that’s what we provide them.”

Xtracover clocked a revenue of over Rs 100 crore in FY 2021-22. “We achieved this milestone in the first year of our unhindered operations. Considering the growth graph, we intend to cross the revenue target of Rs 275 crore in the next financial year,” he added.

The business model also makes sense. The used smartphone market is seeing better margins for retailers compared to the sale of new smartphones. In 2021 alone, India witnessed the purchase of over $15 billion worth of new smartphones online, as per a report by RedSeer Consulting. “With the number of smartphone users reaching the 550-million mark, it is estimated that on average, a recommerce app user sells more than two smartphones from each household when the need to upgrade to new devices rises,” the report added.

Meanwhile, seeing the growth of the market, Walmart-owned Indian online retailer Flipkart acquired electronics recommerce company Yaantra for an undisclosed sum earlier this year. The acquisition, said Flipkart, will augment its existing refurbishment business in the smartphone category.

Founded in 2013 by Jayant Jha, Ankit Saraf and Anmol Gupta, Yaantra repairs and sells refurbished consumer tech products such as smartphones and laptops. With the acquisition of Yaantra, Flipkart said it will enable greater access to affordable refurbished smartphones, offering value and convenience for the end consumers.

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