Retail Asia 2018 RA September.October 2018 (Online) | Page 13

NEWS FEATURE
Current challenges
The primary challenge for the
recommerce sector in India is that it
is mostly unorganised. The concept of
refurbished gadgets is still quite new
and a layman is not even aware of the
term ‘refurbished’. Most people in the
country have been used to dealing with
the unorganised players where there is
a lack of transparency, limited selection
and availability, no quality assurance or
warranty, and absence of clarity about
the authenticity of the gadget. It is
common for fake or stolen devices being
sold to unwary customers.
The fragmented supply chain
and reverse logistics has been another
hindrance for the growth of this sector
thus far. However, this is changing now
with the growth of organised retail and
e-commerce.
Investor’s dilemma
Investments in this sector have been
limited so far, considering the market
size and prevalent opportunity. The
primary reason for this is the signalling
mechanism which investors in India look
at. The venture capital sector in India is
also in the start-up stage. Most of them
look at comparable models in the West
and replicate it in the Indian market.
With time, they are realising that
the Indian market is unique and the
opportunities and problems cannot be
addressed by copying and pasting models
from the West. If anything, they should
be looking East at China, which has
more parallels with the Indian market
than developed markets such as the US.
Growth opportunities
The growth of the entire ecosystem
in India makes it inevitable for this
unorganised sector to be disrupted.
The most important attribute required
to avail this opportunity is focused
execution. Operational efficiency,
partnerships across the ecosystem and
optimal use of technology to converge
trust, convenience and value for money
to consumers is what is required to
succeed in this sector.
Considering the enormous growth
of the recommerce sector in India going
forward, it seems inevitable that pure
recommerce brand(s) would emerge,
which would be identified with second-
hand and refurbished gadgets. We are
already seeing this happening in the used
cars segment. Brands which are focused
on new products would find it difficult
to create the same impact as their primary
attention would be on the new products.
Looking ahead
India is today the world’s fastest-growing
smartphone market. Out of almost
a billion mobile-phone users, only
300 million users are currently using
smartphones. The estimated size of
smartphone recommerce market in India
is over 100 million devices. Recommerce
will undoubtedly be a catalyst in bridging
this digital divide of 700 million.
We are living in extraordinary
times. Anyone with a smartphone and
Internet connection has access to more
information than the President of the US
had 20 years ago. Information is power.
What change will we experience when
one billion people in India have this
power?
Technology is radically transforming
education, healthcare, financial services
and utilities. The primary medium
through which this technology is going
to be accessed by millions will be the
smartphone — the catalyst for creating
change. Recommerce has the potential to
bridge this digital divide in India between
people who have access to technology and
those who do not. ra
The vast number of first-time buyers who are upgrading from a feature phone to a smartphone find great value in refurbished smartphones.
Retail Asia September/October 2018
11