With technology progressing quickly in line with Moore’s law and technology companies, such as Apple, Dell, Lenovo, Samsung, stirring up gadgets at an unprecedented pace, leaves you with no option but to change your gadgets frequently. But what to do with your previous gadget? You can either keep it or you can pass it on to your known ones or you can either exchange it or sell it online/offline. This is where the re-commerce market comes in. This applies not only for electronics but also for many other products, which can be sold and bought in the circular economy of re-commerce.

So, what exactly is re-commerce?

Re-commerce, also known as reverse commerce or resale, refers to the practice of buying and selling previously owned or used products. It involves the resale of consumer goods, often through online marketplaces, second-hand stores, or direct-to-consumer platforms. Re-commerce allows consumers to buy and sell pre-owned items, prolonging the life cycle of products and minimising waste.

Re-commerce model can be described as an evolution and extension of the traditional e-commerce model. In e-commerce, new products are sold and bought directly from online retailers with a focus on convenience and wide selection of goods. On the other hand, re-commerce, involves buying and selling pre-owned or refurbished products, promoting sustainability and cost savings for consumers.

Circular economy versus re-commerce

Circular economy is a broader economic model that aims to minimise waste and pollution, keep products and materials in use, and regenerate natural systems. It focuses on reusing, repairing, remanufacturing and recycling materials to minimise waste and use of new resources. The objective is to construct a sustainable and regenerative economic system compared to the traditional linear ’take-make-waste’ model.

Alternatively, re-commerce refers to a practice in which people who own products can resell obsolete or otherwise unwanted products in exchange of cash or another product. Consumers buy and sell pre-owned products, thus increasing the life cycle of products and reducing waste. It is a strategy which aligns with the principles of a circular economy, but it is not the entire circular economy model.

Top segments in Indian re-commerce industry:

• Refurbished electronics products:

Indian buyers are turning more and more towards refurbished electronic devices. This shift has occurred mainly to the exorbitant rise in prices of new products caused by the global supply chain disruptions during the pandemic. Smartphones have been primary growth drivers, to this market; nonetheless, demand for other electronic products, such as laptops, also rose in recent times.

As per a report by research firm RedSeer, IT services major, Tata Consultancy Services Ltd., sources 1,00,000 refurbished laptops every year from organised re-commerce companies. The report further states that the refurbished electronics goods market in India could grow to US$ 11 billion in gross value by March 2026, up from ~US$ 5 billion in March 2021. Out of this, laptops, televisions, headphones, wearables, washing machines, and gaming consoles are expected to constitute about US$ 1 billion of the market.

• Furniture and appliances:

The Indian refurbished furniture and renewed appliances market was valued at ~US$ 5.7 billion in 2020, which is expected to reach ~USD 9.8 billion by 2025, per a Grant Thornton report. Factors driving this growth include increased focus on personal and environmental health and a general trend towards value-conscious consumption among buyers. The desires of the middle class and rapidly changing preferences of millennials which are influenced by the modern trends, are also contributing substantially to the rising demand for refurbished and remanufactured furniture and appliances in India.

Major products sold in the re-commerce industry by product -

• Electronics
  • Smartphones & Tablets
  • Laptops & Computers
  • Cameras & Photography equipment
  • Home Appliances (Refurbished Refrigerators, Washing Machines, etc.)
  • Others (Gaming Consoles and Accessories, etc.)
• Furniture & Home Goods
  • Sofas & Couches
  • Tables & Chairs
  • Home Decor (Rugs, Paintings, Vases, etc.)
  • Others (Garden Equipment, Bathroom Accessories, etc.)
• Fashion & Apparel
  • Clothing
  • Footwear
  • Accessories (Jewelry, Watches, Handbags, etc.)
• Automotive
  • Used Vehicles
  • Vehicle Parts & Accessories
• Sports & Fitness Equipment
• Others (Toys, Collectibles, Books, etc.)

What is driving the growth of re-commerce in India?

• Millennial and GenZ’s preference for access over ownership:

Young consumers who are now entering their prime earning years have proven to favour the concept of accessibility and sharing over ownership. Extremely successful companies like Uber and Airbnb are couple of examples that come to illustrate how the sharing economy is here to stay.

• Consumers' desire to access used goods at a discount:

Bargain shoppers can easily purchase overstock, out of season, or gently used products from reliable online stores conveniently from their homes. This behaviour is driven by a fear of missing out (FOMO) on good deals.

• The rise of digital marketplaces:

There are plentiful of reliable, easy-to-use digital marketplaces today that have made it easy for consumers to market and sell used goods. They range from offering a wide selection of content to curated content targeted to niche segments.

• Environmental consciousness of consumers and brands:

The ability to resell used goods instead of throwing them away creates an environment where consumers can easily find an ethical outlet for the product and get a fair compensation. There is growing concern towards sustainability and conscious consumption among both consumers and businesses.

The road ahead

The world has recognised that our current economic growth has come at a cost, and it is time to transition from the linear model of ‘take-make-waste’ to a more sustainable circular economy. The urgent need for climate action is making decarbonisation a major disruptor of the 21st century. Achieving a net zero future is crucial and will significantly change every aspect of our daily lives, thereby creating numerous opportunities for startups and businesses in various aspects of circular economy. Large businesses globally are waking up to value-creation through regeneration and existing resources and modifying manufacturing processes to encompass circularity, and this makes it an ideal time for the growth of recommerce industry in India due to increasing awareness and technological advancements. An increased emphasis on the values and philosophy around ‘sustainability’ has resulted in creation of business models that focus on resale, refurbishment, recycling and remanufacturing. The growth of re-commerce and circular economy will not only reduce the widening demand-supply gap but also help in reducing the nation’s heavy reliance on imports. India's leadership in technology and innovation places the re-commerce industry in an advantageous position and will also help to accelerate the cultural acceptance. Solving the puzzle of convenience, cost and consciousness is essential for the success of the circular economy and in turn re-commerce industry. So far, businesses have struggled to balance these three factors, but addressing this challenge will be a key to the success of this industry. Sectors like electronics, fashion, construction and mobility, offer the most significant opportunities for re-commerce market in India.