Higher digital adoption creating more demand for refurbished phone market

Yaantra, the leader in smartphone repairs and refurbishment category, is seeing massive demand from consumers to own refurbished smartphones as the pandemic recedes. Higher usage of smartphones in every aspect of life is behind this demand graph. The company is not only making smartphones affordable for consumers, it also makes many aspirational brands like Apple and Samsung available at a reasonable price point. In a conversation with Bizz Buzz, Yaantra's Cofounder and CEO, Jayant Jha said the startup is facilitating further growth of this category through easy EMI schemes through its partnerships with banks and NBFCs. It has also ventured into repair and refurbished market for laptops and smart devices like smartwatch, smart television in recent time. The company wants to build up a strong ecosystem for refurbished connected devices in coming years. The startup is close to breakeven now and stays open for further fund infusion if need arises

Has the business of Yaantra come back to pre-pandemic levels? How was the business during the pandemic period?

Our business is pretty much back to pre-Covid level. During the lockdown periods, smartphones didn't qualify as essential services. So, we were not able to ship products to consumers. However, there were a lot of incoming requests as the demand had risen a lot during this period due to heavy reliance on mobile phones owing to higher usage in entertainment, studies and many more. So, once the lockdown was lifted, we saw a massive demand from all the geographies. The demand for refurbished phones went up by four to five times because as a segment, this is very much affordable as compared to new phones. So, the demand was massive, both from repair and refurbished products sides.

What were the total number of phones, Yaantra used to sell and repair during the pre-pandemic period? How are those numbers look like now?

Pre-pandemic, we used to do 55,000-60,000 phones per month. Currently, we are pretty much on the same range. Out of this, around 7,000-10,000 are on the repair and maintenance side and the rest are on the sale side.

There is a bit of supply constraint in the market due to ongoing chip shortage seen globally.

Will this drive demand for refurbished cellphones in coming months? What are your views on the refurbished phone market in coming years?

Refurbished market is always driven by consumer demand. Chip shortage could be one factor, but there are many major factors driving the demand. For instance, rising digital adoption is one of the major factors. Similarly, the smart phone penetration in India is still around 42-43 per cent. A lot of consumers are still using feature phones. For those set of consumers, refurbished products provide a great opportunity in terms of affordability. Also, these products are available on financing schemes. So, people can pay as low as Rs500 (per month) and get a smart phone.

Also, refurbished phones have higher demand than any low-priced phones of other brands because even if consumers are buying a refurbished product, they are buying a brand. They are buying an Apple or Samsung phone. Importantly, what Yaantra does is it gives a warranty on the product. India is a very price sensitive, value-driven market. Therefore, what we have seen is that demand is never an issue. We, ourselves, have sold out on most days.

As far as overall market is concerned, we see around 20 per cent annual growth of refurbished phone market in coming years. The market is also likely to shape up more towards organized side. As far entry of new players is concerned at the lower end of the price, I think, such entry will help in expanding the organized market. We feel that we not only make the products affordable, we also make aspirational products in an affordable way. For instance, the joy of owning an Apple phone or Samsung phone will always drive the demand. Therefore, all these factors are catalysts in adoption of these products.

Yaantra has also ventured into the refurbished market of laptops and smart wearables. How is the business shaping up in these categories?

We have recently ventured into laptops and smart devices like smart watch and smart televisions among others. In the longer term, we want to create an ecosystem of refurbished market for connected devices. This is a key focus area for Yaantra. As the categories grow, we will make refurbished products in this segment available for consumers.

Can you throw some light on the EMI schemes available for buying refurbished products?

We have tied up with banks and NBFCs which give those schemes to consumers to buy refurbished products. We have tied up with different financial institutions to cover up the entire geography. Digitally, we enable EMIs. We have seen decent adoption of these schemes. That is the reason that we are aggressively focusing on extending these schemes to all geographies.

How many pin codes does Yaantra currently cover?

We currently cover 21,000 pin codes in which our products are available. Our products are available in almost 450 towns and cities. We plan to cover 750-800 cities in next 24 months.

Will you give some colour on the entire ecosystem which enable Yaantra's operations?

We have built an elaborate ecosystem. We have collaborated with OEMs to leading ecommerce companies, large distributors and retailers. We also have our own platform, PhoneCash which is an AI, ML-driven platform. This platform enables consumers to do their own diagnostics, and sell their phones.

Is Yaantra breakeven now? What are your fund raising plans?

We are very close to be breakeven. We are a growth stage company. Our way of building Yaantra is that we don't want to be a massive (cash) burn company and want to grow in a healthy way. Our idea is to grow at a rapid pace in coming years and if that will be facilitated by fund raising, we will be open to that. We have two PE investors which have infused money in the company. If funding is required, that will not be an issue.