Recommerce: Looking Beyond Flea Markets

Recommerce, also known as reverse commerce or reverse supply, has revolutionized the second-hand shopping landscape, moving beyond traditional flea markets to digital platforms like OLX, Quikr, eBay, Amazon, The RealReal, and Depop.

India’s Recommerce market is thriving, estimated at $31.36 billion in 2023 and expected to reach $42.26 billion by 2028. An Online MBA program can offer valuable insights into this burgeoning sector, equipping learners with the skills needed to navigate its complexities and explore career opportunities in this growing area.

Think second-hand shopping, the picture inevitable is the street side flea market where anything is up for grabs against a hard bargain. In spite of the price advantage, many are hesitant to go there due to quality concerns (e.g. fake goods) and transparency (e.g. stolen goods) about these markets. There is also hesitancy in many about using pre-owned goods (e.g. reputation related).

Gets Bigger & Better

The sale of pre-used (refurbished / pre-owned) goods has just got better and bigger with a more trendy name, re-commence, thanks to the rise of digital marketplaces (e.g. Amazon, The RealReal, Depop, Poshmark, Mercari). According to a study, India’s recommerce market is also thriving and growing bigger and bigger as evidenced by the figures given above.

Recommerce Defined         

When we say recommerce, it means extending the lifecycle of pre-owned products by selling them to the next user after refurbishing and quality checks (this is done professionally unlike in flea markets, where these are available on an “as is where is” basis). The technology ensures that this merchandise is as good as the original. Though recommerce is widely accepted for smartphones and automobiles (for automobiles, refurbishing happens post-purchase), it extends far beyond them.  Popular second-hand finds, these days, include books (rebinding gives a new look) jewellery (elaborate bridal jewellery is bought back by the showrooms and reused) clothes (e.g. party wear), furniture, gadgets (e.g. PC, laptop, speakers, mobiles), home decors, toys and much more.

The Trails

Recommerce is perhaps derived from the flea market. The flea market is a business-to-customer (B > C) proposition where transactions take place on an as-is-where-basis with no repairs or refurbishing (e.g. Chor Bazaar in Mumbai, Anjuna Flea market, Goa, Hyderabad’s Sunday book bazaar). But the organized recommerce assumes various business models:

• Business to Business (B > B): Bulk buyback schemes (e.g. unused raw material)
• Business to Consumer (B > C): Sale of refurbished goods by stores (e.g. refurbished smart watches)
• Consumer to Consumer (C > C): Direct transaction of used items between customers on digital platforms like OLX (e.g. household items or furniture)
• Consumer to Business (C > B): Common consumer to business models are:
  Buy-back (customers return the used items against a pre-determined price. e.g. home appliances). The buy-back scheme helps customer retention.  
  Trade-in offer (customers return used items of any brand in exchange for credit on newer ones. e.g. Smartphones). Aids customer conversion.
  Upcycling: Used items are collected from the consumers cleaned/refurbished and used to sell new products (e.g. mineral water cans)

Slew of Benefits

Affordability is the greatest advantage of recommerce to the customer. For instance, customers can own the latest gadget at a fraction of the brand-new product (e.g. refurbished laptops). Though refurbished, these products are backed by quality assurance and warranty. Let’s list out a few more benefits:

For Customers

• Variety of Choice: Since price is no more a concern you are free to choose the best product based on the features you cherish (e.g. Oppo Reno or Samsung Galaxy in smartphones)
• Can get rare/unique items: e.g. Out of print bestsellers.
• De-cluttering: Items like unused furniture, gadgets and clothes can clutter your homes/ wardrobes. Recommerce helps you with a solution.
• Financial benefit: The bought back old items give financial benefits to the customers.

For Business

• Additional revenue source: E.g. Used tyres are bought back by the manufacturer, re-treaded and sold in the second-hand tyre markets.   
• Convert Price-Sensitive Customers:  Selling pre-used items helps to convert price-sensitive customers. (e.g. A Hero Honda Splendor owner purchases a pre-used, high-end Royal Enfield 650(Bullet).  Having seen the comparative benefits, he could become a full-price customer of Bullet Bike).

For the Society

• Soothes Eco Anxiety: Disposal of un-unused items creates eco-anxiety. Recommerce provides smart solutions for recycling or disposal.
• Encourages circular economy: Recommerce encourages the reuse of existing resources and minimizes the pressure on fresh natural resources

The Bottom Line

A few digital players apart, recommerce sector is largely unorganized. There are many fake digital sites too. Many people do not know what refurbishing means. The apprehension about secondary transactions (duplicate, stolen goods in grey markets) persists.  The solution is the emergence of strong exclusive second-hand marketing brands like Mahindra First Choice, Hyundai Promise or Maruti Suzuki True Value (for used cars), Cashify, and Amazon refurbished which can offset the apprehensions of customers.

Learners’ Opportunity    

Marketing embraces different avenues to push a brand ahead of the curve. ICFAI Online MBA provides the opportunity to practically learn many of these innovative techniques.  For more details, check our program https://online.ifheindia.org/

Discussion Question       

Do you think refurbished goods are as good as new ones? Why?

Source Article

• Shopify – What is Recommerce?
  https://www.shopify.com/in/retail/resale-programs
• Julianna-The 10 Best Things to Buy Second-Hand- Blog-Simplicity Habits
  https://www.thesimplicityhabit.com/best-things-to-buy-second-hand
• Rachel Layne-How Used Products Can Unlock …-Harvard Business Review
  https://hbswk.hbs.edu/item/how-used-products-can-unlock-new-markets-lessons-from-apples-refurbished-iphones
• Madelie Van Niekerk-What is Recommerce?..- ngrammicrolifecycle.com/blog-Jan8, 2024        
  https://www.ingrammicrolifecycle.com/blog/recommerce-definition.