As per a report released by Economic Times, the unused goods market is likely to cross Rs. 115,000 crores. As per Assocham, whether consumer goods like electronics, durables or automobiles – used cars, or the industrial machinery in the capital goods sector the options of re-usage are being considered more actively than ever before. Also, it was indicated that Stocking items is very prominent among Indian households [Source].
Along with Tier-1 cities, e-commerce growth has also been observed in Tier-2 & Tier-3 cities mainly due to growing aspirations & limited access to brands. When it comes to used goods marketplace, the biggest testimony of the market was when Amazon forayed into the used-goods market [via Junglee] thereby allowing individuals to sell their used stuff on Amazon. Though there are couple of players in the used-goods marketplace, there is not a single marketplace for selling Industrial goods, Jewelry & gems, furniture, electronics, musical instruments, etc.
This is the opportunity that the founders of Refabd, a recommerce startup seized when they moved to Delhi for a short period of one year to train for the Civil Services. The glaring lacuna became evident to them when they tried to either hire or purchase used home appliances. Realization then dawned that this must be the experience of short term residents as well as newcomers to a city who are looking at a similar market. The trio was then quick to spot a business opportunity waiting to be tapped in this domain and that’s how Refabd was born!
Today we have a chat with Vineeth Kumar, Co Founder of Refabd. So lets get started with the Q&A…
How did you come up with the idea of venturing into used goods How did you come up with the idea of venturing into used goods marketplace ?
When we, the founders of Refabd, moved to Delhi for chasing our dreams on Civil Service, we personally wanted to setup our home with appliances and furniture. It was difficult for us to resort on the classified platforms, as that lacked transparency, simplicity and trust. Our search to find out a single platform for buying used products was not successful and found a business opportunity and thus Refabd was born.
Can you share some details about the team behind Refabd ?
The founders of Refabd are
- Vineeth Kumar T – Post Graduate from IISc, 6+ years of experience in IT Field
- Rahul Varma K – Post Graduate from Manipal Institute, 5+ Years in Chip Design, QC and Testing
- Durai Gowardhan S – Graduate from PSG Tech, 4+ years of IT experience
We are a team of 20 members including the founders.
How much is the overall market size of used goods market place ?
As per the recent study OLX Crust 2016, Rs. 780 Billion is the Second Hand House Hold market in India in which Rs. 33 Billion is the Used Home Appliances and Furniture serviceable market in India.
What are some of the items that can be sold on Refabd ?
All kinds of large appliances, Furniture and Laptops can be sold on Refabd.
What according to you are some of the USP’s of Refabd from other such sites like Greendust, OLX, etc. [Specifically GreenDust since they also sell refurbished electronic items]
Classified sites like OLX, Quikr and even Shopo are Consumer to Consumer models. C2C model does not work very well with Used goods market as that lacks transparency in pricing, quality and service. Consumers all around the world prefers hassle free experience while shopping online and hence any model around used goods has to be curated.
Curated model will solve issues like pricing around used goods has to be curated. Curated model will solve issues like pricing and quality but still can’t gain the trust of buyers as the curator can’t guarantee post sale care. The model that works very well is a curated inventory based model where in products are sourced from different sources, performs rigorous QC and sell with Warranty. This model can give transparency in pricing, quality as well as post sale care.
Refabd follows this model in which all products undergo thorough quality inspection and given an QC SCORE and then images of the products are taken showing the defects and damages very clearly if any and uploaded with transparency in pricing. Refabd takes this experience to the next level by giving free delivery, easy return, warranty and Buy Back options. When it comes to GreenDust, they mainly focus on electronic goods, especially mobiles. They are not transparent in terms of quality, images and pricing.
Can you let us know about some of the steps taken by the back-end team to to ensure that high quality products are sold on Refabd ?
Refabd quality measures starts from procurement [sourcing] phase itself. Our in house technician/carpenter inspects the products and approves only if the product is sellable after minor repair/refurbishment. Once the products come to the warehouse, it undergoes following phases:
- QC Stage – In this stage, the quality in terms of appearance and working is QC Stage – In this stage, the quality in terms of appearance and working is verified and the condition spec of the product along with QC report is generated
- Cleaning/Refurbishment – Product is cleaned and disinfected thoroughly and minor refurbishment like polishing, change of plastic parts etc., are performed
- Full Cycle Testing [FCT] – Full cycle functionality of the product is tested in this stage by simulating various scenarios. For example, the washing machines undergo a full spin test with clothes in it. All the aspects like noise, water leakage, vibration, power consumption etc., are checked in this phase and added to the QC report
- Photography – In this stage, details images of the product is taken. The images show the defects very clearly if at all any.
- Packaging – The products are packed carefully after the photography and moved to the delivery section
- Product Upload – The product is uploaded to Refabd website. Complete Quality details of the product is shown in the website and what the customer sees in website is what he gets!
Who are the logistics partners of Refabd and how do you ensure that the ROR [Rate of Return] is kept to the minimum in order to maximize revenues.
Refabd manages the logistics on its own to provide quality service to its customers. We are very much flexible in terms of return and provides On the Spot Return if the appearance of the product does not match to customer expectation however is expected to go through the images and product description before purchase and also our customer care personnel explains about the condition of the product to the customer before delivery.
As Refabd is transparent on the product condition, returns are very less. Also inspite of carrying on all the expenses to ensure quality control, the sale price of Refabd goods is marked to, direct sellers of used goods online or offline, keeping the ROR balanced and providing value for money to buyers, ensuring higher sale values to provide return to Refabd investors.
Please walk us through funding of Refabd [Self/Angel/VC] and are you looking for external funding ?
Athamus Venture team invested to unlock the potential of Refabd Platform, it being attractive, unorthodox, and stressed on buy back and warranty issuance to be hallmark of the business. We are raising expansion capital now, to spread to at least 4 more cities like NCR, Pune, Hyderabad and Chennai in next 6 months and 20 more cities by another 12 months.
Many e-commerce companies are now pushing for omni-channel Many e-commerce companies are now pushing for omni-channel presence, does Refabd also have plans to enter into offline as well [especially for big ticket items like Fridge, Washing Machine, Laptops,etc. or other items that require touch & fell] ?
Today, stress is to provide hassle free service though centralized warehouses, with doorstep pickup and delivery services to delight our customers on quality of product and services. We have innovative plans to fulfil the needs to give satisfaction of physical shopping experience going forward and shall be announced in 3 months time.
We would like to understand the customer [i.e. age, cities Tier-1,Tier-2, etc.] as well item demographics on Refabd ?
Refabd is operational only in Bengaluru as of now. Refabd caters to all income group customers with its used and unboxed products. Furniture is sold around the year and appliances demand varies based on season. In summer season refrigerator and ACs are sold more and in rainy season washing machines and ovens are sold more.
Does Refabd also provide ‘Try & Buy’ facility for its customers, especially items like clothing, shoes, etc.
We introduced On the Spot return in case of appearance mismatch and 7 days return in case of quality issue which is as good as Try and Buy.
Is Refabd a pure B2C marketplace for used goods or you also cater to the B2B segment ?
We are into B2B as well catering the needs of builders, rental companies & Startup Companies.
There is growing competition in used-goods marketplace where there are vertical marketplaces like Droom [Automobiles], GreenDust [electronics], GoZefo [Furniture], etc. and horizontal marketplaces like OLX, Quikr, Kraftly, etc. how does Refabd ensure that it stays ahead of the growing competition in providing excellent service [goods] at competitive pricing ?
We intend to keep our margins balanced, to reach out masses not only in Tier-1 but Tier-2 & 3 cities, coupled with fact that, Refabd has direct accountability to customer on each product sold makes us very different from our peers.
Do you have any tie-ups with e-commerce companies so that goods returned by the customer [reverse logistics] can be sold on your platform at a lesser price/as a used-item ?
We have tie up with e-commerce companies for sourcing used and unboxed products.
There is a section where ‘Unused Products’ [particularly electronics are sold], don’t you think that it would dilute the core offerings of Refabd which is into selling ‘Quality Refurbished Items’ ?
As said earlier, Refabd wants to cater all income group customers and also help the customer to upgrade their product as and when their income increases. The unboxed products help for this.
Customers who are planning to buy unused products can buy unboxed products from Refabd at around 70% of their budget. We ensure that unboxed products are in excellent condition w.r.t appearance and quality.
2017 so far has not been good for e-commerce companies – funds drying up, huge cash-burn; how according to you should entrepreneurs deal with such adverse situations ?
Lot of action is happening in e-commerce space, the business segment is evolving from its early days and maturing into set formats, players that provide quality service with the goods will evolve to fulfill the demands. It is difficult to comment on business model of larger formats right now, as they too are in a flux to compete even bigger challenges out.
Online commerce has been so far about discounting, customer acquisition, etc. how do you see 2017 panning out for the online commerce, hyper-local & used goods marketplace sector ?
e-commerce is here to stay and satisfy daily requirements of Indian population, the process business discrepancies have been rooted out to make businesses efficient, as long as e-commerce platforms sell ‘value for money’ goods and services they will find buyers and expand.
Initial customer acquisition is mostly built on discounting, any other methods that entrepreneurs can follow to gain more customers keeping the burn-rate to the minimum [ensuring that transactions are repetitive instead of one-time] ?
In addition to providing best value for money, quality of service, delivery and follow up maintenance will be the differentiators.
As per your entrepreneurial experience, when should an entrepreneur look out for external funding ?
When your idea starts generating cash flows to sustain itself organically and scaling/expansion can only be through external capitalization, to capture greater market share.
Some books that you highly recommend for entrepreneurs
- The 7 Day Startup: You Don’t Learn Until You Launch by Dan Norris
- ReWork: Change the Way You Work Forever
- The Magic of Thinking Big
Entrepreneurs you highly admire and some traits of theirs that you would like to imbibe.
Elon Musk – Determination, Dream Big and Curiosity to implement
Closing thoughts for our readers.
Chase your dreams and always remember that a very minute detail addition can bring so much of positive difference. Try to find out this small detail which is missing and add it to your solution and you will find growth.
We thank Rahul Kumar for sharing his insights with our readers. Do give Refabd a spin and share your experience in the comments section. If you have any questions for Rahul or the Refabd Team, please email them here or share them via a comment to this article.