Indian internet companies are seeing a surge in second hand sales and online shopping.
According to a report from a consultancy, Secondhand Markets, second hand retailers in India account for roughly 20 per cent of the total online retail market in the country.
“The rise in second-hand goods is a positive sign for the sector, as it could help it compete with larger players in the sector,” said Anil Vij, managing director of Secondhand Market, in an interview with ET.
In 2016, Amazon had reported a growth of 7.6 per cent, followed by Flipkart at 5.4 per cent and Snapdeal at 4.4 percent.
While Flipkand was one of the fastest growing second hand businesses, it was not as successful as Amazon or Snapdeal.
Flipkandi also reported its second-quarter earnings of Rs. 2,000 crore.
“The increase in secondhand is a good sign for a number of reasons.
It could give Flipkands brand and its reputation a boost in the long run.
Also, the increase in the market share of Flipkandan could help Flipkanda become the leading second hand retailer,” said Vij.
The second-tier companies are not only taking second-hands.
There is also a rise in third-tier sellers as well.
“Third-tier merchants are also growing as they are able to earn more revenue from the second-level merchants,” said Ajay Prakash, managing partner at Secondhand Retailers India.
“We expect this trend to continue in the coming years,” added Vij.
Third- and fourth-tier retailers are also also growing their revenue and profit margins.
The Indian market is a relatively large one, but third- and four-tier businesses are seeing significant growth in their business model.
“We expect the market to continue to grow, especially for online sales,” said Prakashes.
In India, there are over 30 million online retail stores and there are around 2,500 brick and mortar outlets in the total market, which is expected to grow to 5.3 million by 2019.
Secondhand stores are mostly concentrated in the cities and are seen as a better way to save on the costs associated with a traditional store.