Many of us equate refurbished products with either defective or second-hand goods, and this prejudice makes many of us even skip the thought of considering refurbished products.
Hitendra Chaturvedi, founder & CEO of Greendust, in an interview with IBNLive seeks to dispel some of the myths surrounding refurbished goods.
IBNLive: What actually are refurbished products?
Hitendra Chaturvedi: Refurbished products are typically the products that are returned by customers with the return policy or the factory seconds or demo items in retail shops.
A lot of companies have return policies. Let’s take an e-commerce company, Snapdeal. You order a product from Snapdeal and find that a button in the phone is not working or you simply don’t like the colour, and, therefore, you return it back within the return policy period. So, this product now cannot be sold as a brand new item and will, therefore, fall under the refurbished category.
So these products, which are opened items that may have some fault or may not have any fault whatsoever, come back to us, go through a policy check, get refurbished and are sold as refurbished goods.
Also, factory second products are also sold as refurbished items. For example, if there is even a little bit of issue with the quality control, the item goes under the refurbished domain. In a factory second products, the damage could be as small as a scratch.
Besides, demo items in a retail shop that later come back are also refurbished.
So these are not the products used by customers. These are typically unused products.
In some cases, refurbished devices also include products damaged in transit. They are in no way second-hand products
IBNLive: People usually equate refurbished products with second-hand products. How are you tackling this issue?
Hitendra: We have three categories of products. So, we are very clear when we say this is a used product, a refurbished product or a surplus item.
We also sell surplus items – products that are overstock. Let’s say, a company produced 1000 items of a product, sold only 800 and 200 are lying. So these end of the life model is then sold as surplus.
IBNLive: How safe are the refurbished deals for buyers?
Hitendra: On Greendust, refurbished product go through a 50-point quality check before they are sold. Also, we use genuine parts from OEMs during refurbishing.
Considering the customer satisfaction in mind, we give a one-year warranty on these products. We also offer buyers a one-year accidental damage and liquid protection in some cases as well as an option to purchase an additional one-year of extended warranty.
And then if a customer is not happy for any reason whatsoever, we have a 15-day return policy wherein we can either take the product back, repair and refurbish it again, or even give a 100 per cent refund.
IBNLive: How do you ensure the quality of refurbished products?
Hitendra: A refurbished product is gone through a proper inspection of critical components of the products. Like what I told you earlier, we have a 50-point quality check. Let’s take a laptop, for instance. So, from the battery to the screen to the motherboard, we check each and everything and ensure that they are in working condition.
IBNLive: Could you elaborate upon on your quality inspection process?
Hitendra: Let’s take an LED TV. After it is refurbished, we ensure that it runs for at least 24 hours, there are no lines on the screen, and the sound quality is proper. So, we check for the screen, power supply, PCB, sound and all the other controls. So, we have a checklist for every product category that our engineers go through and inspect. And if it is within the manufacturer’s tolerance, we give it an approval and say that it’s okay.
IBNLive: What are the different product categories that you sell refurbished products under?
Hitendra: We started with home appliances including refrigerators, air conditioners, washing machines in 2009. The next one was consumer electronics including LEDs and music systems. Then we got to into IT products including laptops and desktops. And the fourth one we are into is mobiles. As the e-commerce growth is happening and we are working very closely with the e-commerce companies, we are noticing that we are getting a lot of products (as we are doing return management) which include apparels and shoes also.
IBNLive: How different your offline stores are from your online store?
Hitendra: The difference is in the kind of products that we sell. It means, offline, we typically end up selling large products like ACs, washing machines and refrigerators. On the online store, we mainly sell smaller items like mobiles, laptops, speakers and headsets.
This is because, in tier-2 and tier-3 cities, people prefer to go out to buy large appliances. They are not comfortable buying them online. But we sell more products online. Our 60-70 per cent of the sales are happening online. The policies, however, remain the same for both offline and online stores. Greendust has over 300 brick-and-mortar stores pan India.
IBNLive: What is the minimum discount percentage offered on refurbished products? And how does this percentage vary for different items?
Hitendra: Discounts on refurbished products vary from 30 per cent to 50 per cent. In other words, no refurbished product is sold at a discount less than 30 per cent. While in case of surplus goods, the discount can be little less.
IBNLive: What is the warranty period for refurbished products and who takes care of it – Greendust or manufacturers?
Hitendra: These products come with a warranty period of 1 year and Greendust takes care of it. So, we either repair the product, replace it or give a complete refund.
IBNLive: Given that you have tied-up with Xiaomi, Apple, Motorola, Samsung and other key players, so what kind of products do you get from them to be sold as refurbished?
Hitendra: If you look at Samsung, we get all the products that it sells. From Xiaomi and Apple , we get only mobile phones. But as we have also joined hands with e-commerce players, we get all kind of Apple products from them including Macs and iPads.
Also, there is another facet to it as well. Let’s take Xiaomi. Xiaomi is selling their new items only through Flipkart, and therefore, returns also come to Flipkart. So, I have an arrangement with Flipkart and Xiaomi that open-box (including returns to Flipkart) and refurbished products will be sold through Greendust.
IBNLive: Do the refurbished products come bundled with all the accessories that are originally in the box?
Hitendra: Yes, 95 per cent of the times, these products come with all the accessories. In other cases, let’s say, phones, the earphones might be missing, but the charger and battery always come with them.
IBNLive: What it the ratio of new models to old models sold under the refurbished category?
Hitendra: I would say over 90 per cent of products sold under the refurbished category are the new models.
IBNLive: Where do you see the refurbished market going in India?
Hitendra: It is believed that e-commerce in India will be $115 billion market by 2025. The return rate in e-commerce is about 15 per cent. This means close to $17 billion worth of items will be returned only with e-commerce. So, if you believe that e-commerce in India will grow, the sale of refurbished items will absolutely grow.