The great Indian urban middle class is coming of age. Their disposable income is rising, but with it are rising their aspirations as well as inflation. For all those times when their incomes fall short of their aspirations, it’s re-commerce companies to the rescue.
Re-commerce companies sell surplus, carton-damaged (but otherwise unused), ageing and refurbished goods. They deal in:
- Ageing stock – stored by manufacturers and retailers for over 90 days and less than 180 days old)
- Unused goods – with damaged boxes but new product
- Refurbished goods – faulty products that are repaired before being re-sold
One such company which buy goods from original manufacturers and retailers, refurbishes them if required, and then sells them at lower prices is Surpluss.in.
Headquartered in Delhi with regional offices in Mumbai and Bangalore, Surpluss.in has tie ups and deals with all the major brands in India and sells all across the country and deals in B2B segment in seven Indian states.
In an exclusive interview with Indiaretailing Bureau, Managing Director, Surpluss.in, HS Bhatia discusses the future of the re-commerce companies in a country like India…
Refurbish and reverse logistics – distant dreams just a short while ago – are widely accepted options in India today. Are Indian consumers warming to the idea of ‘re-commerce’ firms?
Yes, there is great scope in this ecosystem. Surplus and refurbished products including electronics goods, IT products, telecom gadgets etc are the most up-to-date and in demand in the market. The refurbished market here in India has a great potential for the coming years and has the intensifying market power with vast untapped potential. The size of refurbished mobiles-only market is expected to reach US$ 14 billion globally by 2017, according to Gartner Research.
The online shopping market in India is expected to rise from US$20 billion now to more than US$50 billion in 2020, according to industry estimates.
The refurbished and unboxed market itself has grown by 50 per cent in 2014 to about US$2 billion and is expected to grow 30 per cent annually by 2020.
Share your journey of establishing refurbishing and reverse logistics in India. How did you develop the idea of helping marketplaces sell excess inventory?
Everyone dreams of owning high-end electronic products, brands, appliances and fashion accessories but the prohibitive prices of such products force them to curb their desires. But a lot of people don’t know that they can get such international brands at an affordable rate also and that too delivered at their home.
And we decided to tap on the potential market. Delhi-headquartered Surpluss.in has made big strides as an e-retailer of overstocked, excess inventory, unboxed (e-tailer returns), pre-owned and refurbished products, ranging from mobile phones, electronics to apparels and other consumer products.
The market of surplus in electronics, mobile, apparel and consumer durable alone is over US$ 20 billion. At any given point of time at least 10 per cent of these categories qualify for surplus, overstock, ageing inventory, refurbished etc. This market fascinated us and today we can see that it has become a kind of flywheel. The momentum, the acceleration — it all shows the potential.
Surpluss.in was conceived with an idea to reach out to digitally active consumers across India, empowering the aspirations of these consumers and to make the ‘sought-after’ brands and products more affordable. Surpluss addresses this market need in a transparent manner and solves the ageing and unsold inventory of the brands. Hence, to leverage these huge opportunities, a group of like-minded entrepreneurs with decades of experience in sales, logistics and information technology, among others, converged under the brand Surpluss.in.
Describe your business model.
As per our vision, we cater to people’s aspirations by providing great brands at great prices with great user experience. Surpluss.in is India’s leading e-retailer of overstocked, unboxed, pre-owned and refurbished products, ranging from high-end mobile phones and tablets to apparels and other consumer products. Our business is to provide branded products at extremely high value to aspirational customers.
Surpluss.in is an e-commerce enabler of branded surplus goods connecting demand gaps to excess supply pockets and leveraging untapped potential through the cloud. The e-commerce platform is working on inventory model. The brand exclusively deals in overstocked, unboxed, refurbished products, ranging from high-end mobile phones and tablets to apparels and many more. The young start-up is already selling products from Samsung, LG, Xiaomi, OnePlus One, HTC, Alcatel, Xolo, and other brands in the mobile and tablet segments.
In addition, the company has gained a lot of popularity in its recently-introduced apparel category, covering jeans, footwear, sarees and other summer wear like bikinis. In the apparel and lifestyle categories, the company has products from Levis, Benetton, CK, Guess, Zara, Armani, Gant, Ishimaya, and a host of other elite brands.
Describe your target audience.
The current target group of www.surpluss.in is from the age-group 18-30 years, as these youngsters have more disposable income and over a period of time they will continue to purchase to fuel their aspirations. The lifetime value will be directly proportional to the demographic dividend of India.
What is the percentage difference between customers who buy new items versus those who prefer pre-owned items?
Well, if Surplus generated itself is five to six per cent, then we can safely assume that these many want to buy surplus today as per availability. And the number is growing. so we are now trying for international surplus sourcing from China and Dubai too.
Which e-marketplaces/ brick-and-mortar retailers have you tied-up with?
We have tied up with most of major brands, manufacturers, exporters, large retail chains, e-commerce portals who are producers or sellers and hence generate overstock/ surplus due to their large volumes.
In 2015, eBay, Flipkart and Snapdeal had said they were considering the idea of getting into selling refurbished items. How has that impacted your business?
We have strategic tie up with Amazon, Snapdeal and Flipkart to empower its refurbished corner. These mentioned platforms are selling surplus refurbished products through us.
Have you seen an upswing in the number of consumers who opt for refurbished items since you started?
Yes, we have 37 per cent of repeat customers and it’s a huge number with humongous scope.
What are your expansion plans?
We have a simple and clear expansion strategy by category and customer segments. In terms of category we continue to do controlled experimentation and focus on ones that offer maximum value to customers. Our strategy is to maximize surplus choices for customers across categories in mobility, lifestyle etc. This includes aging inventory, international surplus, export surplus, manufacturing surplus and refurbished mobiles.
Leveraging our analytics we realized that a sizable portion of our buyers were small retail shops and we plan to direct to retail online channel of surplus focusing on LEDs, white and brown goods. In D2R (Direct to Retail) through www.bizpluss.in, our focus will be on hyper-local model where we are able to solve pain of small retailers and provide them a trading platform. Here, we plan to increase our retailer base to over 10,000 active retailers and over 100 brands to fuel D2R and B2C marketplace.