India-based and Walmart-owned Flipkart has launched an eCommerce platform called 2GUD that focuses on the sale of refurbished electronics. The site is the latest entry in what some people call “recommerce,” an area of online retail that is showing signs of gaining fresh steam.
“At present, the refurbished store is selling mobile phones, laptops, smartwatches, tablets and streaming devices,” according to one account. “In the coming days, Flipkart will launch speakers, power banks, smart assistants, hair dryers, hair straighteners, TV sets and 400 other product categories.”
Grades and Guarantees
For now, 2GUD works best for consumers on mobile devices, but the website has a message that promises “a flawless desktop experience” is to come. The products sold on the Flipkart-operated site are “unused and returned or used products restored to full functionality by professionals,” according to 2GUD. “Each product is certified and graded by the experts at F1 Info Solutions and Services, with over 140 service centers all over India, or by one of our many trusted partners.”
The products sold by 2GUD come with warranties of up to 12 months, and with the option of returns within 10 days of purchase. The site’s pitch boils down to organization and assurance, as Anil Goteti, the Flipkart vice president who oversees 2GUD, told a reporter. “The refurbished goods market has remained highly fragmented and unorganized despite its size, primarily due to complex processes and missing assurance on the quality of products,” Goteti said.
The refurbished market for consumer electronics stands at about $10 billion globally, according to one estimate, which included survey results that indicated the vast majority of consumers are willing to use B2C marketplaces to buy such goods. For its part, Flipkart has estimated that within six years, that market could reach $20 billion.
In India specifically, the market size stands at an estimated $4 billion. “The feeling of status elevation by using a better-quality brand or product at a reasonable price point is helping this segment grow,” reads that report. “Even more so, the large number of first-time buyers, students and technophiles who want to upgrade their gadgets find great value in refurbished smartphones.”
And that’s not all that is driving the growth of refurbished consumer electronics in India.
“There is also a huge untapped supply of used smartphones in India,” the report said. “For example, many smartphone users sell their devices after using [them] for less than two years, meaning that each device usually changes hands three times before reaching the end of the product life cycle.”
Refurbished smartphones make up a big part of the market, with sales especially strong in such countries as India, South Africa and Nigeria, according to another estimate. That opportunity is also pulling Flipkart/2GUD competitors into the space in India. One of them is HyperXchange, which operates what it calls an “online-to-offline electronics recommerce business.” Customers order products online for delivery or store pickup within 24 hours; the company also picks up items for refurbishing from consumers’ homes and offices.
China also stands as a potential hotspot for the recommerce trend. At $60 billion, the recommerce category in China was nearly three times the size of the nation’s ride-sharing economy last year, CBNData indicates.
Chinese consumers have demonstrated interest in the recommerce field, but the category is still growing and doesn’t yet include a particularly large group of players. Currently, Alibaba-owned Xianyu and Tencent-backed Zhuan Zhuan are the biggest platforms for recommerce in the country, holding nearly 90 percent of the category last year.
Digital commerce has made possible the sales of all types of products and services to consumers. The coming years promise to bring significant growth in refurbished items, especially in Asia, assuming current trends hold.