1 Year Warranty Continue on Second Hand Electronics

It is rightly said that markets are never static. It continually needs to be studied for new trends and extinction or evolution of old ones. And that is exactly what a bunch of IIT-B graduates did before conceptualizing PreGrab.

PreGrab is a B2C marketplace for online purchase of pre-owned products like refrigerators and washing machines. With relocation being the norm among today's youngsters - roughly 6 lakh people relocate every year within Bangalore itself - it was easy to imagine demand picking up for these type of products.

"Most people don't want to compromise on a comfortable lifestyle even when constantly being on the move," says Ankit Agarwal, one of the co-founders of PreGrab. "Pre-owned products attract this crowd because they generally tend to reject long-term investments on household goods which could be burdensome each time they change location."

In pic: Co-founders of PreGrab (clockwise): Arpit Gaur, Ankit Agarwal, Pankaj Mohanpuria, Rohin Bakshi and Vaibhav Kalra

Hawk-eyed hawking

Launched on January 20 this year, PreGrab has already picked up 120 orders, each with an average selling rate of Rs. 6,000, that too without any spend on marketing. However, this isn't necessarily a novel concept, aided in part by Kapil Sharma's advertisement campaign for OLX. Yet, with trust admittedly being the main issue in the pre-owned market, PreGrab seems to be making further strides by trying to address this problem.

"Classified platforms like OLX and Quikr only connect buyers and sellers but we ensure proper quality checks of all our products on various parameters before putting them up on our website," says Agarwal. "Our products also come with a warranty card and we have an easy return policy. In some ways, we are a first-of-a-kind certified platform for pre-owned products and there has been no precedent for such a service in India till now."

Operationally, the startup does not hold any inventory and enters into tie-ups with dealers to directly source products from them. It has created a list of parameters under which each product will be verified. For instance, a refrigerator may be defrost or direct cool, may differ on the kind of trays available or the performance of the compressor, etc. Market trends are then identified using an algorithm, whereby features that are in great demand are given a higher rating as they are listed on the website.

Buyer-seller satisfaction

"The navigation and cataloguing on the website makes it easy to select products," says Sriket Baheti, a senior manager at Flipkart. "The process of placing an order is also straightforward and the entire transaction, including delivery, was over in just a day's time."

This also helps the dealer sell his products online. "Before this, dealers had no way of identifying which products were good and which were not," says Agarwal. "This data gives them the insight to price their products according to the demand cycle among buyers."

Syed Salman, the only dealer PreGrab has worked with till now agrees with that, "Customer satisfaction is what counts the most and this has helped me deliver that. I have sold over 70 products through the website in less than 30 days and the feedback has been positive," he adds.

Retelling retail

However, this market is still replete with challenges since dealing with electronics - particularly second-hand goods - does not come easy as servicing and other related problems are aplenty. The other point of concern could be the renting goods industry, but Agarwal does not see a lot of potential in that market.

"Suppose you are getting a single door fridge for Rs. 5,000 in the pre-owned goods market. Now, renting the same item would cost you about Rs. 800 per month, which anyway comes up to be almost Rs. 5,000. In addition to this, you will also need to pay security. Moreover, buyers in this market have the choice of selling their products, the option of which is totally eliminated when renting."

Broadening the basket

Currently the entire pre-owned goods market in India stands at just about $20 billion, with automobiles being the major player, followed by consumer durables and home furnishings. This may be because penetration for these products is very less. A Deutsche Bank report puts the figure at 60% for televisions, 21% for refrigerators and just 9% and 6% for washing machines and air conditioners respectively, but this could change in the days to come. "The replacement cycles of these products are also changing," says Agarwal. "Earlier people used to keep a product for 8-10 years. Now they are replacing them in just 4-5 years."

Having started with refrigerators and washing machines under home appliances, they plan to scale up within the consumer durables space before expanding to other categories. "We had decided not to initially approach anyone for funding before we were absolutely confident about the market and that can happen only when we are already in the market," says Agarwal. "But, the response has been encouraging. We initially expected just 1 order per day but we are already clocking 2.7 orders on an average a day and that too with just 1 dealer. We see huge potential here and our estimate is that this market will grow to $50 billion by 2020," he says.

PreGrab is working to be established as a white label brand whereby it grows to become a trusted platform for every certified pre-owned product. It is planning to expand across Bangalore and 3 tier-1 cities across multiple categories by the end of the next financial year.

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Source: https://m.economictimes.com/small-biz/startups/with-warranty-verification-pregrab-takes-buying-pre-owned-products-to-the-next-level/articleshow/51324857.cms

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