For the average Indian, a latest version of iPhone or Samsung Note is a luxury. A good offer is hard to come by for at least a year, by when the next model is already in the market. But what if you had an option? If you have ever wanted a new model smartphone and could not afford it, here is a company worth taking note of.
A Delhi boy, Yuvraj Aman Singh did his graduation in Business Information Systems and Management from Middlesex University, UK. When he came back to India in 2003, he started a franchise store for Tata Teleservices. After a successful stint, in 2007, Yuvraj started his refurbished phones business, with brands like Sony Ericsson and Samsung, among others. “Initially, we were selling only CDMA phones at a small counter. It became a super hit; there were riots at our shop as there were 10 contenders to buy one item; we had to call the police,” he recollects. Rocking Deals was making up to Rs 10 lakh per day at the time, with mere word-of-mouth publicity.
“We were giving [returned] phones worth Rs 20,000 for Rs 12,000 after refurbishing. Online commerce was not big then, so discounts were not easy to come by. Customers coming to Delhi from across the country dropped in. We opened seven more shops in 2007,” says Yuvraj.
Almost a decade later, Rocking Deals is one of the largest sellers of unboxed and refurbished phones in India, in online and offline channels. They launched unboxed and refurbished phones with ShopClues before Diwali last year. “It was a super hit. In four months, we had a GMV of Rs 85 crore. Soon we started selling on eBay, Amazon, and Snapdeal too,” Yuvraj claims.
Moulding the business model
According to Yuvraj, about 5-8 percent of fresh handsets sold in India are returned. Rocking Deals acquires such phones from vendors, refurbish and repack it, and sell it for small margins. “Now we have a refurbishing factory in Gurgaon of one lakh sqft. We give extended warranties for used phones. We ensure the best quality, authenticated by the brand itself. For an Apple iPhone, we refurbish according to their standards,” claims Yuvraj. The lifespan of a refurbished phone depends on the quality of the brand. For instance, Samsung is better than Micromax; iPhone can be used for two years and more.
Rocking Deals’ current average selling price is Rs 7,500-8,000. The most expensive ones are iPhone s6 and Samsung s7. One Plus, Xiaomi, Apple, Samsung, and InFocus are their most popular brands.
Ensuring security and privacy
With pre-owned phones, there are always concerns on privacy. Many portals sell products without any responsibility, at the best price they can get and without verifying where the vendor is taking it. Is it being sold as refurbished or a fake “brand new” one? “Other players often sell it to retailers who will sell them as new. There is no ethics; they think short term. We don’t do that,” says Yuvraj.
Also, Rocking Deals has strategic alliances with companies like Terasci and FutureDial. The former’s technology is used to wipe off any hard drive. “We just connect a phone to them. It tests automatically, and wipes off data. We package it before sending it to the customer, with a warranty card,” says Yuvraj. In fact, the US-based Terasci provides data sanitisation process to meet any data erasure requirement. Their client base includes the likes of FBI and US Federal government.
Wide customer base
According to a survey conducted by ShopClues, 70 percent of the demand for used or unboxed mobiles, tablets and laptops now comes from smaller cities, such as Hisar and Nashik. On an average, 40 percent of orders come from top metros and 60 percent from the remaining cities.
Rocking Deals targets the young crowd – professionals and students who want to change phones every six months or so. “They would prefer upgrading with refurbished phones. We conduct three rounds of testing: auto mode, manual, and pilot, before it is packaged. We provide customer service too,” says Yuvraj. He claims that over the years, they have built trust on their quality.
However, according to Yuvraj, more players entering the market now sell the same product as new. “We don’t do that. We spend heavily on refurbishing. We have a good customer base on Facebook as well. We do not advertise at all, we don’t believe in burning money,” he says, adding that sourcing is a challenge due to lack of ethics.
“Many users remove the original phone parts and give us faulty phones, so we have to ensure they work fine,” Yuvraj says.
Of course, Indian customers are now spoilt for choice by e-commerce portals pumping in money to give discounts. Rocking Deals sells on those portals too, ensuring accessibility. “If Amazon’s products are returned, we refurbish it, and then sell it back on Amazon. These days, most people have more than one phone; they prefer refurbished ones,” Yuvraj adds.
Rocking deals made revenue of Rs 150 crore in FY 2016, and is targeting Rs 300 crore in FY 2017. Yuvraj says: “We did not try for VC funding so far. But with growth, we need funding. The market is massive. Refurbishing takes time, but margins are good enough.” Sales on Rocking Deals website make Rs 7-8 lakh per day, while their sales on Amazon, Snapdeal, and eBay make Rs 60 lakh per day. During Diwali sales, Rs 1 crore was also achieved in a single day.
Rocking Deals has a refurbishing factory in Noida for imported electronics from around the world. These used devices are refurbished and sold on Amazon and eBay abroad.
“We want to grow as an international business, by getting into those countries for refurbishing too. We have an office in China already and some refurbishing is done there as well,” says Yuvraj.
Refurbished phones and electronics is a market that will never die, thanks to increasing returns of smartphones on ecommerce portals. (The statistics estimate that 25 percent returns for online purchase in India).
Besides established players like Green Dust, Gobol, and OverCart, many smaller players are entering the scene. But with more players come more chances of fraud. In case of smartphones, Indian customer base is growing fast, and refurbished phones will make a huge chunk of it very soon. The key is to ensure credibility in quality and customer service.