Don’t Resell Yourself Short

Sunitha Natti, The New Indian Express

Chennai, 5 April 2015

Moving out of town, but don’t want to take along your fully functional fridge and ac? Eyeing a 42-inch HD TV but don’t want to shell out a thousand rupees per inch? Or, perhaps, itching to get an iPhone 6 Plus but don’t want to cough up that exorbitant asking price? Don’t worry. Trade portals like Olx, Quikr, eBay and Junglee have not only come to the rescue of price-sensitive Indians, looking for a good bargain in villas as much as veggies, they’ve also made second-hand buying and selling of goods fashionable. It’s a win-win situation, with online buyer-seller platforms convincing consumers of both product quality, and affordability.

“The Indian market always had a healthy second-hand sales culture. But online marketplaces are driving the social acceptability of used goods and have wider and more persistent accessibility than the traditional classified ads,” observes Devangshu Dutta, chief executive of market research firm Third Eyesight. Everything is available at negotiable prices. The only difference between then and now-the once-used products on sale these days are in good working condition, with some even commanding premium prices for their quality.

“The market for used goods is growing. We foresee new types of products being transacted online. Person-to-person sales are on the rise as more individuals understand and transact with ease online,” says Mahendra Nerurkar, general manager and director, Junglee.com, which is part of the world’s largest online retailer Amazon. With acceptability of second-hand goods rising, Amazon entered India in 2012—14 years after it purchased Junglee.

India’s used goods market is likely to touch Rs 1,15,000 crore in 2015 from Rs 80,000 crore in 2014, says Assocham. “Notwithstanding the market appetite, there was a significant trust deficit earlier regarding quality of the goods and reliability of the seller/buyer. Organized players like us and online shopping aggregators are reviving sales of re-used goods,” says Nagendra Palle, CEO, Mahindra First Choice Wheels Ltd, which also use online marketplaces like Olx and Quikr to sell re-used cars. “Currently, 20-25 per cent of our inventory is sold through these online platforms,” Palle explains.

According to a recent OLX CRUST Research, in 2014-15, goods worth Rs 56,200 crore, up from Rs 22,000 crore last year, are lying locked at people’s homes in the urban areas alone. These goods are no longer in use and have the potential to create a sustainable market for second-hand goods market if put on sale. “We have coined the term ‘Brown Money’ to refer to the money locked in goods gathering dust in our homes,” explains Amarjit Singh Batra, CEO, Olx India. Interestingly, one-fifth of the goods being stocked in urban Indian homes have ceased to be relevant to them, he notes.

According to Batra, platforms like Olx, are helping users unlock the money hidden in used items. “From a country of scarcity, we are moving towards a country of abundance, for at least some people. People are buying more, consuming more, and, in the process, wasting more. We want to help people waste less through collaborative consumption and extending the life-cycle of the products,” says Batra.

Interestingly, one out of every two of the 200 million Internet users in India, as per ComScore research, access retail services (websites) online. “The growing Internet base increases visibility, makes trading faster and importantly, improves accessibility,” says Dutta. Another motivational factor for buying used goods is that these products are less expensive than new goods, and yet meet product quality requirements.

For instance, Arvind from Ranchi wanted to sell his two-year-old one tonne Samsung split AC for Rs 13,500, it was viewed 16 times within 10 minutes of posting the ad online.

Considering the used goods market is still evolving, the industry is yet to overcome some challenges. With several classifieds, there is often poor due diligence of the type of advertisement, availability of picture, authenticity of classified, much to the annoyance of genuine customers.This is something, online market aggregators like Junglee, Olx and Quikr are trying to bridge, maintaining site-wide standardization with verification of seller, availability of pictures to ensure reliability of the product.

“All local sellers are verified through a phone verification process. All used product classifieds are screened for pictures and relevance. Thus, customers who may have not originally intended to buy used goods are also exposed to the used goods classifieds,” says Nerurkar.

Currently, automobiles and mobile phones are the widely bought and sold, but of late computer software, consumer electronics, kitchen appliances, clothing, books, mobile phones/smartphones, home appliances, watches, baby & children products, bicycles/two-wheelers, furniture, musical instruments, camera, sporting goods, car accessories and computer hardware are finding traction.

Trading is being actively pursued in cities like Delhi, Mumbai, Chennai, Bengaluru, Hyderabad, Kolkata, Patna, Guwahati, Ahmedabad, Lucknow, Jaipur, Chandigarh, Indore, Kochi, Bhubaneswar and Pune. “Mobile phones have enabled more Tier II and III cities to buy/sell and transact online with ease,” says Mahendra.

(Published in The New Indian Express.)