This refurbished electronics brand wants to turn India into re-manufacturing capital

Founded in 2016, Kolkata-headquartered HyperXchange is India's number one refurbished electronics brand. HX is disrupting the reverse logistics supply chain through its breakthrough developments in Faraday and ELVIS – across procurement, last-mile repair and buyback. Faraday is HX's patented hardware plus software solution that leverages the power of AI, IoT, and advanced camera technology that helps automate a device testing process that is running on manual mode across the globe.

Millions of pre-owned devices change hands every month; majority of them without even minimal QC, increasing cost of unplanned repair and risk of customers getting spurious products. While there are some software based products that can test some internal sensors in mobile devices, Faraday is the only platform in the world that provides a hardware based solution to test the complete product, inside and out. Speaking to Bizz Buzz exclusively, Dipanjan Purakayastha and Satanik Roy, co-founders, HyperXchange, explain how the pandemic helped their business grow manifold and the way forward

You have said that HyperXchange (HX) is expecting ten times growth in business during the current financial year, backed by a steady rise in demand for refurbished electronics products, primarily mobile phones and laptops, and an expansion of your distribution footprint. But how big is the overall market size of such refurbished products? And at what rate the industry is growing?

Purakayastha: It's a very fast growing segment. Going by a recent RedSeer (global consulting firm) study, the overall market size of refurbished electronics products is estimated to be $10 billion in India by 2023. Globally, the market size is estimated to be $100 billion. During pre-Covid, the market was growing at 25 per cent, but post-Covid, there has been a phenomenal growth. It has been growing at a CAGR of nearly 80 per cent. The segment has been witnessing 4x-5x growth at the top level.

And that's not without a reason. While a large number of adults had to go through work from home during the pandemic, it was study from home for the school and college going kids and youth, pushing up demands for smartphones and laptops. Mind you that this time actual income of most of the people came down and so affordability was a factor. Around the same time, semi conductor chip prices went through the roof (there has been overall cost-push following the recent Russia-Ukraine crisis). The gray market for refurbished products has never been that trustworthy at all. Therefore, all these factors, taken together, the organised sector (or top level) refurbished market came in handy.

For most individuals, the main advantage of purchasing a refurbished phone is the cost savings over purchasing a brand new phone. Refurbished mobiles are offered at a discount since they cannot be marketed or branded as 'new' once they have been used. The cost reductions are especially beneficial if your phone was unexpectedly lost, stolen, or malfunctioned, and you do not have the cash to acquire a new one. Another benefit of buying a refurbished phone is that it is a more ecologically responsible alternative. Refurbished phones are recycled items, which means they do not end up in landfills and so do not contribute to environmental damage.

How are the price differences between a new products and a refurbished one?

Purakayastha: The average price difference between the new and refurbished product is around 25-35 per cent, depending on the age of the product, model, and brand, among others.

You have recently announced your association with the United Nations Global Compact (UNGC), the world's largest sustainable development initiative, that allows businesses to come together and align their strategies and operations with the ten principles on human rights, labor, environment, and anti-corruption; and take actions while emphasizing the Sustainable Development Goals (SDGs). What is this association all about?

Purakayastha: HyperXchange has been committed to a climate positive revolution with its refurbished technology since its inception. In 2021, HX introduced the Global Reforestation Initiative in sync with UNSDG's sustainable forest management by actively protecting nature by planting trees to help improve local ecosystems and create sustainable agro-forestry livelihoods for the local communities as well as to preserve the coast. HyperXchange launched a range of limited-edition designer yet upcycled and eco-friendly accessories handcrafted by financially challenged women in semi-urban/rural areas of India. HX is closely working with the State governments to identify at-risk areas and initiate dense implantation of Mangrove saplings. Mangroves being a fast-growing plant provides dense protective cover against sea waves and act as an incubator for the local ecosystem.

You are also in the process of expanding footprints, right?

Roy: HX, which currently has 350 retail stores across the country, is looking to take up its store count to 3,500 by this financial year. Most of its stores are currently in the suburban areas in tier-I and tier-II towns. It is looking at opening more outlets in tier-II and tier-III towns moving forward. The smaller towns and markets are seeing a rise in disposable income and aspiration among people to own branded products. This is likely to drive demand for refurbished products in these towns and cities. We are also looking at government and public utility offices. Our target is 8000 such offices by the end of the year.

You have overseas expansion plans as well….

Roy: Yes. We have recently firmed up European expansion by signing strategic deals with the UK and Netherlands governments. We have also finalised a £3 million investment to establish business operations in England and Scotland. HX is also working closely with the Netherlands government to start procurement and processing operations in its renowned 'Innovation Quarter'.

You are also looking at foraying into training space, if I am not mistaking….

Roy: Yes. We are in talks with University of Aberdeen and University of Stratclyde, both Scotland-based, for this. Let's see how it goes.

For you, technology plays a crucial role in the type of business you are in. What kind of technology you have been embracing?

Roy: Just to give you an example, we have a proprietary B2B product, the Faraday, which are automated kiosks for buying back or exchanging old products from customers and selling them new ones. The Faraday's unique capabilities include accurate valuation, plug-&-play installation, ability to customize, geofence, and rollout transaction/incentive policies instantly across its entire network. Many such proprietary products are in the pipeline.

How much of your revenues comes from phone, how much from laptop and how much from other products?

Roy: At present, 80 per cent of our sales revenue comes from phones, 15 per cent from laptops and the remaining 5 per cent from other products.

What is the way forward?

Roy: Our ultimate objective is to turn India into re-manufacturing capital- procuring globally, refurbishing locally and selling globally. Our positioning would be "We don't sell products, we sell trust."