Flipkart executives say that the company plans on selling refurbished smartphones in India by Diwali. They further added that Flipkart certified handsets will be sold both online and offline. This decision might have come due to the recent introduction of the Goods and Services Tax (GST) in India, which has taken away the pricing advantage. It is a good move for the company as they have a huge inventory of open box devices that have been returned to them. Two executives told The Economic Times that the company has already had discussions with offline distributors. They also mentioned that Ekart logistics the courier company owned by Flipkart will be used to make the deliveries.
“Even though Flipkart has of late tightened return norms on mobile phones and only allows replacement in case of a defect, it is already saddled with a lot of return inventory,”
said one of the Flipkart Executives to Economic Times.
The other executive said that there are also a lot of devices with minor defects which the company will get fixed and tested before selling. These refurbished smartphones will come with a limited warranty and will be sold in three categories which would range anywhere from 60 – 75 percent of the devices original cost. The Economic Times also got in touch with Flipkart who declined to comment.
In the report, it was also mentioned that the company is wanting to sell refurbished Lenovo, Motorola, Samsung, Panasonic, Micromax, and Sony devices. Recently Amazon India has started offline distribution of smartphones and has also ventured into selling refurbished devices. However, they currently only sell refurbished Coolpad devices.
“The online marketplaces will have to open newer channels for sales. The online market contribution to total smartphone sales, too, has stagnated at around 30% and hence future growth for Flipkart and Amazon in this category will come from offline sales and venturing into newer areas like refurbished handsets,”
said one of the executives.
Previously online retailers used to buy the devices in areas where the tax levied was less and then they used to sell the devices at a discounted rate, but now due to the introduction of GST, a uniform tax of 12 percent is levied on the devices in every state.