Amazon, and Flipkart eyeing renovate goods market in India

E-commerce giants Amazon and Flipkart are bullish on the nascent refurbished goods market in the country, with a particular target on gadgets and smartphones. Flipkart has a separate platform, 2GUD, for the same, while Amazon is offering such products under its Amazon Renewed program.

The renovate goods market in India is mostly unorganized but is witnessing a rapid rise. In 2019, 14 lakh second-hand smartphones sold in India, an increase of nearly 14%. Automobile industry command a 60% share in the organized part of the market in India, while electronics, including smartphones, have 25%, and other products such as home/kitchen products and apparels claim 15%.

In 2018, China’s second-hand goods market, was valued at $100 billion. Alibaba, who is a terrific player in the market, has two refurbished goods market places under its sunshade, Idle Fish and Xianyu. Idle Fish has 200 million users and is valued at $3 billion.

Amazon offers unboxed & refurbished products across 20 categories, including mobile phones, headphones, laptops, and home & kitchen products, through its Renewed program, which is introduced in India in 2017. Lately, Amazon has raised its focus on this vertical and launched a year-end sale entirely for Renewed products, wherein the company offered refurbished & unboxed products at discounted prices.

According to Vivek Somareddy, director, seller services, Amazon India, “ In India smartphones, headphones, and laptops are the highest selling categories on the platform. The increasing phenomenon of customers switching their mobile phones in less than six months, creates a supply of mildly used products that can be refurbished to a like-new condition, and sold with a six-month warranty. Compared to the previous year, the refurbished personal computer category saw a rise of over 300% in 2019, while the sales of kitchen appliances and headphones have quadrupled.”

Flipkart’s 2GUD, which mainly caters to tier II & III markets, is ruled by laptops, mobile phones, and audio products. As per Mr. Chanakya Gupta, head of 2GUD, the platform has over 1,000 registered sellers and has served close to a million customers from over the 3,000 cities across India. Depending on the product category, 2GUD offers a warranty of 3-12 months.

In India, the refurbished goods market already has the presence of players such as OLX and Quikr, which operate on the (C2C) customer-to-customer model. Moreover, these players have been veering towards a vertical marketplace model. To drive the rise, Quikr is focusing on real estate while OLX is focussing on the auto segment. Because of their (B2C) business-to-consumer model and their robust infrastructure, Flipkart and Amazon has high chance of succeeding in the refurbished market.

Both Quikr and OLX have been battling with scams and fake products on their platforms. A B2C model will be an edge for marketplaces as the vendor, and the seller will have to take the responsibility of the products being sold. Flipkart and Amazon are working on building their supply chain capabilities around these products to ensure a gentle run. Besides, securing that these products don’t swallow into their primary business is critical.