Refurbished gadgets are becoming a rage in the market

There are brand new products and then there are second-hand ones. In between, is an emerging category flooding the Indian market - refurbished electronic goods, available at half or three-fourth the price of a sealed product. They are claimed to be as good as new, and come with the seller's warranty, instead of the manufacturer's warranty.

Refurbished goods need not be only second-hand products, repaired and quality-checked, but also include factory seconds, dead on arrivals, and ecommerce and retail returns, apart from an open box (not sealed) device. These are significantly different from second-hand products available at local markets, such as Nehru Place or Gaffar Market in New Delhi, or sold on online portals like Quikr and OLX, where the products are neither repaired nor provided a warranty.

While the refurbished market is primarily dominated by unorganised retailers, who may or may not carry out even basic repairs, there are many organised players, too. GreenDust, for example, is an early entrant, and has been doubling its growth since it started five years ago. The company offers 25- 40 per cent discount on the actual cost of a product on refurbished factory seconds, and retail and ecommerce returns, through its 17 centres across the country. "Mobile devices are being sold online. However, home appliances and consumer durables are sold through retail stores. For example, buying a refrigerator or a washing machine is still a social affair in India. At the moment, we have 300 franchise stores across India," says Hitendra Chaturvedi, founder and CEO, GreenDust. GreenDust offers one-year warranty on all its products. It even has a 30-day return policy, if the buyer is not happy with the product. For warranty, the company has its own service setup, offering onsite service for large home appliances.

Reboot Systems is yet another player in the refurbished products space. However, it deals only in laptops and desktops of all brands, and smartphones and tablets from Apple. The starting range of refurbished desktops from Reboot is Rs 4,999 which comes with a one-year, no-questions-asked replacement policy. But this does not include the cost of a monitor, keyboard and mouse. The company sources IT products from corporate houses, and is even willing to tap into large households in India for sourcing gadgets. It also provides a certificate with each product that states how green their initiative is. Reboot uses a hybrid model - both online and offline - to sell its wares.

A third, Overcart, facilitates companies to sell their unwanted or excess stock, and unboxed and refurbished devices, to end consumers through their website. It does not refurbish goods on its own. "We can identify the fault, if any. Then they are passed on to authorised service centres or centralised refurbished centres. The devices come with company warranty, whatever is left. We have tied up with Asus and Xiaomi, and other brands that have manufacturing facilities in India because it ensures that the parts for repair are easily available in the country," says Saptarshi Nath, Managing Director and co-founder, Overcart.com. Gobol, Overstock and Valuecart are also into selling refurbished gadgets.

Then, there are others. Ingram Micro, for example, is one of the biggest smartphone distributors in India, that refurbishes smartphones at its own facility and distributes them through its existing brick-and-mortal retail channel. "Refurbished goods are a great way to meet aspirational value without paying too much. We started in December 2014, and refurbish close to 10,000 smartphones every month. Our products are priced competitively and come with tamper-proof stickers so that the customer is well aware of the refurbished device and is not cheated by the shopkeeper," says Anil Kaushik, Director, Services, Ingram Micro India.

While demand for refurbished goods had primarily been from tier II and tier III cities, companies are witnessing a rise in demand from metros, too. On an average, the ratio, today, would be 40 per cent from top metros and 60 per cent from the remaining cities.

Though individual players are dominating this space, ecommerce portals are also looking at selling refurbished devices. Recently, Amazon started a pilot for selling refurbished Samsung and Xiaomi devices through 'fulfilled' third-party sellers. These devices were listed under the refurbished category and came with six months warranty. Says Noor Patel, Director Category Management, Consumer Electronics and Media, Amazon India: "We have started piloting the refurbished category about two weeks ago. Our consumer insights give us enough reason to believe that there is a market in India for quality-assured, branded refurbished smartphones, and the early response from customers has been encouraging. We are witnessing a lot of interest from various sellers who are keen to offer refurbished mobile phones with warranties of six months or more from brands, through our marketplace."

eBay India, too, has partnered with eight companies to sell refurbished mobile phones, tablets and laptops. It plans to expand its offering to home appliances, including washing machines, refrigerators and gaming consoles by December. "We have tied up with Amazon India and eBay India to sell our products under the refurbished category on their portals," says Chaturvedi of Greendust.

Refurbished gadgets are not only the choice of individuals and families, but even small corporates and start-ups are considering them seriously. For GreenDust, start-ups from Delhi, Mumbai and Bangalore add to its consumer base, as they end up saving 30-40 per cent on their IT spends, but enjoy one-year warranty along with service support on branded products. Says Rahul Chowdhury, CEO and co-founder, Reboot: "Schools too are opting for refurbished PCs as it helps in saving cost. Interestingly, in the US, 27 states mandate all government agencies and state-owned schools and enterprises to buy only refurbished IT products."

With no clear study, industry players estimate this market to be anywhere between $15 billion and $20 billion, mostly dominated by the unorganised sector and small regional players. With increasing demand of refurbished products, the segment is expected to grow exponentially in the coming years.