At a time when the fast-growing refurbished electronics space is dominated by the gray market, lacks structure and lacks consumer confidence, a new generation of startups and players is tackling customer pain points and changing the game. .
These tech platforms are trying to tap into the potential of the refurbished or used electronics market in India, which is already growing at a CAGR of 16% and expected to be worth $11 billion by FY26. , according to a recent management consultancy report. RedSeer company.
The refurbished industry has recovered in India in recent years, but organized players in the industry are still lacking, said Soumitra Gupta, CEO of Xtracover, a New Delhi-based e-commerce platform for electronic devices and refurbished mobile phones. “I think this is one of the main reasons for the lack of customer confidence in refurbished products,” he added.
Satanik Roy, co-founder and product manager of HyperXchange, a Kolkata-based re-commerce marketplace for refurbished electronic gadgets, agrees.
“About 95% of the market is gray. The market for refurbished electronics exists globally, in every city, in the form of small gray market stores, lacking predictable quality and trust,” he explained.
HyperXchange relies on its proprietary hardware to rate and price pre-owned electronics, both retail and enterprise-wide, and also acts as quality control for the refurbishment process. “It removes human oversight and makes the cycle from sourcing to selling globally scalable,” explained Roy, who was named to the Forbes 30 Under 30 India & Asia lists for 2021. He launched HyperXchange since his dorm in 2016 with co-founders Dipanjan Purkayastha and Asis Chakraborty.
HyperXchange also uses its last mile franchisees as well as major online marketplaces to create an infinitely scalable network for supply and sales, in both offline and online modes.
Meanwhile, Xtracover offers a one-year warranty on sales of certified pre-owned devices, along with easy payment options and pan-India delivery. Its health check certification verifies the quality of the devices by performing 64 automated and semi-automated tests. It also generates a certificate uploaded to the cloud to maintain transparency.
Smartphones make up the bulk of the most in-demand refurbished items. According to a report by RedSeer Consulting, with 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, according to the report.
“Mobile phones are the most in demand in terms of product category, followed by laptops, as home work for adults and home study for children have driven up demand for devices such as mobiles, tablets and laptops. In terms of brands, people choose Apple,” said Roy of HyperXchange.
Also for Xtracover, Apple products are the fan favorites, followed by Xiaomi devices. “They represent an important part of our sales. As iPhones grow in popularity on our platform, they are followed by Redmi, Realme, Oppo and Oneplus,” said Gupta, adding, “Besides being the most cost-effective solution, the reason why we recover refurbished devices on our platform is quality assurance. . Today, consumers aspire to own high-end devices but at reasonable costs, and that is what we offer them.
Xtracover recorded revenue of over Rs 100 crore in the 2021-22 financial year. “We achieved this milestone in the first year of our unhindered operations. Considering the growth chart, we intend to break through the revenue target of Rs 275 crore in the next financial year,” he added.
The business model also makes sense. The used smartphone market sees better margins for retailers compared to the sale of new smartphones. In 2021 alone, India witnessed the purchase of over $15 billion in new smartphones online, according to 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 increases. “, adds the report.
Meanwhile, seeing the market grow, Walmart-owned Indian online retailer Flipkart acquired e-recommerce company Yaantra for an undisclosed amount earlier this year. The acquisition, Flipkart said, will increase 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 technology products such as smartphones and laptops. With the acquisition of Yaantra, Flipkart said it will enable greater access to affordable refurbished smartphones, delivering value and convenience to end consumers.