Flipkart looks to do an encore in refurbished gadgets with 2GUD
Homegrown e-commerce firm Flipkart, which was acquired by US retail giant Walmart earlier this year, last week entered the refurbished goods business and will initially sell second-hand smartphones, tablets, laptops and other electronic items, a company statement said.
The development comes almost three months after it sold its holdings in global e-commerce firm eBay Inc., which it had formally acquired in August 2017 and ran as a separate entity, during its buyout by Walmart.
Named 2GUD, the refurbished goods marketplace will function independently of Flipkart.com and will offer products that carry a warranty of 3-12 months, the statement added.
The platform will be headed by Anil Goteti, vice president at Flipkart who also heads the marketplace business and had led eBay India. The initial mobile web offering will be developed into a separate app.
At the time Flipkart sold eBay.in, it said it would re-launch its Indian operations in a new avatar that will initially focus on cross-border trade.
The sale of smartphones accounts for over 60% of Flipkart's gross merchandise value (GMV), a metric used to track sales on an e-commerce platform not taking into account discounts. During Diwali sales in 2017, Flipkart took the lead in mobile phone sales, which accounted for 70%.
The new platform opens up a channel of liquidation directly by the marketplace for returned and unboxed shipments of electronics returned by consumers. In August 2017, Flipkart said it planned to sell refurbished smartphones by Diwali then in order to clear its return inventory for the gadgets. It had said then that it would sell three categories of used phones priced in the range of 60-75% of the original cost.
With the current offering, Flipkart will enter a space dominated by consumer-to-consumer (C2C) classifieds platforms such as OLX and Quikr. While these platforms facilitate buyer and seller interaction, Flipkart is trying to leverage its brand, customer experience and logistics capabilities to tap into a market which is estimated to grow to $20 billion over the next five years, the statement added. Apart from the C2C players, startups like Rentomojo have introduced rent-a-smartphone product on its platform.
“As a market leader, Flipkart has always tried to solve for India and offer a more fulfilling shopping experience in every aspect. With 2GUD, we have removed the trust deficit that exists in the refurbished goods market, and along with the added convenience, are offering customers yet another avenue to access quality products at the most affordable prices,” said Kalyan Krishnamurthy, chief executive of Flipkart, in the statement.
Other players in the space
Flipkart’s direct competition Amazon India also sells refurbished phones, laptops and small electronics through its Certified Refurbished category as part of Amazon Renewed. The platform had also opened up a C2C portal ‘Local finds’ in 2017. Similarly, ShopClues had announced selling refurbished smartphones through its portal.
Venture-backed companies like Greendust and Overcart sell refurbished products with a focus on large appliances apart from smartphones and laptops.
In June, refurbished electronics marketplace Cashify had raised $12 million (Rs 82.19 crore) in a Series C round led by Chinese alternative asset management firms CDH Investments and Morningside Group. Chinese re-commerce platform Aihuishou and existing investors Bessemer Ventures and Shunwei Capital had also put in money.