Indians are changing phones every 10-12 months transforming Indian Re-commerce Industry. Two out of three consumers in India want to switch to a new phone within the next 12 months. Amidst the frequent launches of the phone and their upgrades, the pre-owned smartphone market is also on the rise wherein people are resorting to buying more pre-owned smartphones. According to a Deloitte India report, the Indian used smartphone market is expected to reach US$4 billion by 2020. Indian Re-commerce players are now targeting South Asian smartphone markets.
Constantly changing the landscape of Indian smartphone user base is all set to touch about 442.5 million by 2022, making it amongst the fastest growing smartphone market in the world according to a report by IDC. The country is a juncture wherein it is experiencing a trend, wherein consumers upgrading their phones every 10-12 months resulting surplus demand for smartphones. The demand has not only attracted attentions of mobile manufacturers & suppliers from across the world but also has stirred the second-hand smartphone market in the country.
Currently a large part of the pre-owned mobile market is still offline driven by dealers, mom n pop shops, but in last few years online marketplaces are increasing, primarily dominated by classified sites like OLX &Quikr along with re-commerce platforms like Instacash, Cashify, Budli, Togofogo etc.
Re-commerce platforms are a breakthrough in the re-commerce industry
Re-commerce or Reverse Commerce or Reverse Marketplace is a new and emerging concept or practice which involves buying and selling of old products online through an e-commerce platform built solely for this purpose. These companies buy archaic and undesired goods, renovate them and reintroduce them to the consumers market. Such companies have definite principles for fixing the price and have designated software to settle on product prices based on indicators like age, wear and tear and market demand.
With tech advancement the shelf life of products has diminished. To address this, and to create a totally innovative model of business, Reverse commerce companies like Bundli(India), Cashify (India), Recommerce Solutions (France), Gazelle (USA), recently introduced the business model in the market. The re-commerce companies accumulate old and used goods from users and companies, and also returned goods from e-commerce portals, products which may or may not have defects. Once collected they sort them, repair them if needed, repack them, make sure that these products work properly and then sell them on Recommerce platforms or directly to companies.
What the Indian re-commerce players say?
According to TechArch reports, Indian Smartphone Industry will witness 13% growth in sales in 2019 with an estimated 149 million smartphones to be sold in the year. Talking about the reason for steep growth trends in Industry, Prateek Goel, Co-founder InstaCash said, “Frequent sales, offers, exchanges, cashbacks on ecommerce platforms give a boost on the sales on our platform. Also, the sellers’ common problems like frequent negotiations, delayed selling and no seller protection on the classified sites & open market, has resulted in more users who wish to sell phone instantly on platforms like ours”.
Seeing the success in 21 cities across India, Goel forayed to the high potential smartphone markets of south Asian country which is growing at rate of 6.5% every year by launching in Malaysia through a strategic partnership with CompAsia in 2018. With our soaring success in Malaysia with 11300 mobile trade-ins just in three months, the company is all set for Singapore, Taiwan.
How is Reverse commerce better than online classifieds?
Recommerce business has an advantage over online classifieds such as Olx, Quikr, eBay, etc. as these companies essentially buy the goods of the users and do not simply offer a platform to sell.
Besides, the online Classifieds never promise the sale of the goods but the Recommerce business platforms come with distinct software to settle on the price of the goods and ensure sale of the goods in and around the preset price.
The re-commerce companies are like middlemen who buy products from you and reach the same to the ultimate user. Thus, the customer privacy is upheld by keeping the personal details limited only to the companies. These platforms guarantee repurchase phone price to the holder, along with logistical support through doorstep pickup and payment saving them from the hassle of answering numerous buyer calls and negotiation from classified sites.
Benefits of Re-commerce model
Re-commerce business model has a lot of benefits for the companies concerned and the users. Here are some of them –
It ensures sale of used and old products
Many of us vacillate while buying expensive devices due to very less or no resale prospects. This new business model has guaranteed the sale of our used and old goods and hence enticed us to spend more and move from online classifieds to re-commerce platforms to sell our used devices.
Recycled goods at Reasonable Price
These businesses generally offer B2B solutions to operators, retailers and manufacturers or business-to-customer websites to ultimate customers who find these products at a even-handed price.
Less wastage of resources
Recycling of products enhances the total shelf life and checks wastage of resources.