Gone are the days when second hand goods were considered synonymous with second-rated goods. In the current economic scenario, the consumer, who is at the centre of all the action, is caught in a situation where the rise in his disposable income is not commensurate to the soaring aspirations and prices. The condition thus, has compelled him to consider re-usage of pre-owned goods (which was earlier stigmatized) as an effective and rational alternative to first hand items, only a lot cheaper and affordable.
Further, thanks to the emergence of disruptive technologies which are playing a pivotal role in mitigating the information gap between the seller and the buyer, thereby eliminating the quintessential inhibition that the latter often possesses towards used items regarding quality and reliability.
Here’s a startup which banks on the potential of the used-goods market in the country, and is working towards making this sector more organized and transparent with the help of technology.
Co-founded by Ankit Agarwal, Arpit Gaur, Pankaj Mohanpuria, Rohin Bakshi and Vaibhav Kalra in January 2016, PreGrab is B2C platform for pre-owned goods, presently dealing with consumer durables- washing machines and refrigerators in Bengaluru. The startup wants to establish itself as a one stop destination, white label flagship in the pre-owned products market. It holds an aspiration to bring the pre-owned products market at par with the new products market when it comes to information symmetry and post-sales services.
Key Problems Addressed by PreGrab
The primary problem that this startup aims to solve is of the lack of reliability and visibility of used products from a buyer’s viewpoint. “All the present arrangements in the market (online and offline) fail to provide these deliverables leaving the market highly untapped and the core problem unsolved,” maintained, Rohin. He was quick to add, “We are trying to address the problem statement by certifying the products listed on PreGrab based on various popular and technical parameters and providing post sales services such as logistics, free warranty and servicing period and a no questions asked return policy* to all its customers to ensure complete customer satisfaction which he/she had been compromising on so far.”
Elaborating further on the matter, Pankaj stated that the present arrangements/establishments in this sector are fairly seller centric. This is a novel idea to ensure that the seller gets the best price for his sale. However, at the same time, a similar problem exists on the buyer’s end where he/she is unaware if he/she is paying the best price for the product being bought. This problem exists due to information asymmetry. Other than this, the buyer faces multiple hurdles such as logistics and installation before he/she can start using the product. It doesn’t end just there yet. The post-sales services such as warranties and servicing are neglected as much. What all this culminates to is a bad customer experience. This is where PreGrab steps up the game in providing a step-by-step solution to all these problems for a never before experienced customer satisfaction in the pre-owned products market.
A Quick Glance at the Company’s Offerings
- All products listed on the website will be certified and rated based on a list of transparent technical and popular parameters.
- Onsite Warranty and Servicing: The company provides a minimum 6-month warranty and servicing on its products
- No Questions asked return policies*: It has 7-Day no questions asked return policy.
- The products are listed online with a user-friendly interface to provide a better look and feel to the buyer.
- Free shipping within the city.
Technology Employed by the Startup
The team claims to be working on a complex algorithm to ensure that a single rating accurately represents all aspects including but not limited to the aesthetics quotient, technical quotient, seller quotient etc. based on individual importance to the buyer. Among other things, it is developing mechanisms to streamline the verification process and create inventory management apps for the sellers, which are too be launched soon.
PreGrab works on a B2C marketplace model where the company lists the products of dealers in the market after verifying and certifying them. For every sale, PreGrab shares a percentage margin with the dealer. The post sales services including logistics, warranty and servicing are the onus of PreGrab.
Monetization and Traction Details
Presently, the startup is generating revenue on margins on every sale that it makes through the platform. In the near future, it will also provide the buyers with an option of buying additional warranty and servicing over and above the free warranty and servicing on the products.
Since its launch on 20th January 2016, the company claims to have processed over 230 orders. Following are the additional metrics:
- GMV : Rs 14,22,400 (Annualized GMV of INR 63+Lakhs)
- ASP : Rs 6200
PreGrab is currently bootstrapped. However, it is in talks with investors to raise an external funding in order to meet its expansion plans.
Market Size and Opportunities
Talking about the market size, Rohin said, “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. This owes to the replacement cycles of these products which are decreasing from what they used to be, say ten years ago. We are expecting this market to hit the $50 billion number by 2020.”
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. The team confirmed that it would like to explore other categories as well as connecting businesses to other small businesses and customers to customers in time to come.
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