"Refurbished category has huge business opportunity": Shivani Suri, eBay India

Cash-crunched to buy expensive electronic goods this Diwali? Hang on, don't fret. Check out goods from the refurbished category, which not only show off a drool worthy price tag, but are 'as good as new' according to the latest campaign from eBay India.

The refurbished goods market is an emerging category, which lies between the brand new and the second hand product categories. The goods sold in this category can cater to your needs without burning a hole in your pocket. Although it is a fairly nascent market especially in the organised sector, local markets such as New Delhi's Gaffar Market and the one at Nehru Place, have always been selling such products.

Refurbished products are factory seconds, demo or display products, and are dead on arrivals, as well as e-commerce and retail returns. The segment has so far been dominated by unorganised players who neither repair nor provide warranty on such products. However, a number of digital platforms like GreenDust, Overcart and Reboot are making attempts to disrupt the space by repairing electronic goods, running quality checks and selling them with a warranty at discounted rates.

And, the latest player to join this bandwagon is the online marketplace eBay India, which launched its refurbished product category eBay Choices , in August, this year.

The company's new long format digital pre-Diwali campaign titled 'As Good As New' revolves around teenager Gattu, who misplaces his laptop. Owing to the affordable refurbished products available on eBay India, Gattu not only buys himself a laptop but also a refurbished mobile phone for his father. The film, which is strong on human emotions and projects the importance of family ties, highlights the difference between old, new and refurbished products. The campaign has been created by Jishnu Sen and directed by Vikas Ghulati.

Shivani Suri, director, marketing, eBay India, agrees that while it is at a nascent stage, it provides a huge business opportunity in India.

"All studies indicate that by 2020, the e-commerce market will be upwards of $115 billion; assuming there is a return rate of 10-15 per cent, the refurbished category will be valued between $12-15 billion," she asserts.

Supporting the data, Suri explains that the refurbished category is being driven by aspirational customers largely from tier II and tier III towns. It is the aspiration to own branded products that will drive this category in the Indian market.

Without divulging the details, she informs us that eBay India targets both the youth (in their late teens as shown in the campaign), as well as the working class.

"The price of refurbished products is as low as 40 per cent. The growth in e-commerce is being fuelled by tier II and tier III towns and there are new buyer segments that are coming in. This category will suit the wallet size of that segment," says Suri.

In the first phase, eBay India introduced live product listings largely in mobile, laptops and tablet categories. However, in the future, the company plans to expand and enter the home appliances, gaming consoles and clothing categories as well.

The company launched the category with close to 3,000 live listings which has now gone up to over 12,000 listings across categories. eBay currently lists refurbished products from 16 organised refurbishers such as GreenDust, ValueCart, Budli, and My Return Solutions, amongst others. The aggregator also has manufacturer listings. eBay India claims that the total value of the listed products is over $30 million.

In less than a quarter, since its launch in August this year, Suri claims that the category has witnessed a significant growth of 200 per cent over the last two months.

However, like the refurbishing platforms, eBay India's biggest challenge is to make the consumers aware and educate them about the category. The online marketplace sees the digital campaign as a small step in the larger plan to drive awareness.

"Consumers often mistake refurbish goods as old and used. Our aim is to create that distinction and educate the consumers through our campaign. We have used digital (both web and mobile) to reach out to consumers through videos and infographics. We also use the services of the call centres to educate consumers. The company is using social media and social commerce heavily to drive the awareness," Suri informs.

eBay India, however, is not looking at investment in traditional media in the near future.

Refurbished product listings on eBay India comes with either seller/retailer warranty or manufacture warranty. All the products listed are thoroughly checked, tested, repacked and listed on the site.

Expert speak

K Vaitheeswaran, currently an e-commerce consultant and founder of Indiaplaza, believes there is potential for the category in India. According to him, there is a varied consumer base which does not have the spending power to buy high-end gadgets at full price.

"For these consumers, it makes sense to buy refurbished products than second hand ones," he notes.

However, he is quick to add that there is always a certain 'scepticism' associated with the category. The challenge, he feels, will be to create awareness and build trust about the category.

"If the educating bit is being done by a third party platform like eBay, it will be difficult to build the trust. The best way to educate consumers is for manufacturers like Sony or Samsung to stand behind the refurbished products and educate the consumers, something which is impossible for them," he concludes.

But, Pratik Gupta, co-founder, FoxyMoron, feels that the eBay India campaign does a fairly 'good job' of creating awareness. Gupta, who has also worked with GreenDust, a refurbishing player, feels that the first battle with this category is to make the consumer understand that a refurbished product is not a second-hand product.

"It is difficult to make consumers understand the concept of 'refurbished products' in a 30-second ad. The campaign, in question, is over two-minutes long in which 20 seconds are dedicated to explain what the category is all about. The story is relatable and will resonate with families," he notes.

eBay India, Gupta asserts, should re-target consumers who have seen more than 75 per cent of the film and explain the concept to them in a quick 30-second ad.

Gupta is quite in favour of the refurbished category of goods. He feels the category provides a 'lifestyle upgrade' to consumers, making their money work hard apart from committing to curb e-waste. For companies, he feels, refurbished goods make a wonderful cost-cutting measure.