OLX and IMRB International have come up with a study that reveals growing trend of selling and buying used goods. It also points out potential for monetisation of used goods in urban India, which is sitting on Rs. 22k crore worth used goods.
Indians have an habit of stocking goods they no longer use. The general idea is that people store used goods to use later on, though that happens rarely. A new study conducted by e-commerce site OLX and research firm IMRB International says total estimated realizable value of stocked goods in urban in India is whopping Rs. 22,000 crore. The study covers 12 cities of India, 4800 consumers, between the age group of 19 – 60 years.
The first OLX Consumer Research on Used-Goods and Selling Trends (CRUST) Survey for 2013-14 emphasises on the used goods market in urban India, and the attitude of urban Indians towards used goods. The study points out the habit of stocking goods that are no longer used causes space constraints at home as well as prevent them from liquidating those goods to earn money and buy items that are more relevant.
Mumbai topped the clutter chart with more households stocking than anywhere else in India. The survey found the categories most stocked to be kitchen and home appliances, mobile phones, clothing, watches, and books.
The survey found that the primary reason urban Indians are stocking used goods is because they feel they will use it at a later date (24% of respondents), although that rarely happens. Another 20% of the respondents said they have ceased to find value in using the product, implying a change in their taste and preferences, even though the product is in a good condition. Emotional attachment (17% of respondents) to certain products also makes people hang on to them.
The study also points out Indians have started to sell used goods. “Buying the latest product has become increasingly important for people today with 70% of respondents saying they sell used goods to earn quick cash and use it to upgrade to a better product. The desire to quickly upgrade has also led to a large number of nearly new, branded products that are up for sale at a much lower price. Space constraint, non-functionality of product (to the user), and maintenance cost leads to about 60%, 59% and 51% of the respondents selling used goods, respectively,” says the study.
On trend of purchasing of used goods, survey says people are turning towards buying of used goods. Lower cost turned out to be the most critical factor with 87% of respondents saying used good marketplaces offer items that are less expensive, and 83% percent of respondents saying that it gave them a good brand at a much cheaper price.
82% of respondents also said online marketplaces, such as OLX, came with higher seller trust, as they gave the opportunity to meet the seller and test the product before the purchase.
“With a value conscious mindset, the older generation tends to extract maximum value out of the used goods. However, the younger generation is less sentimental, and looks for faster product upgrade. With product life cycles getting shorter, C2C classified companies need to target this mobile generation and provide the right environment and platform for C2C trading”, says Dipankar Sen, Associate Vice President at IMRB International.
