Overcart: A decent proposal
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Saptarshi Nath and Alexander Souter first met when Souter, now 34, came to New Delhi in 2010, on a six-month project for American member-based advisory firm CEB. Nath was a management consultant for the same firm. Together, they headed a 20-member team and carried out research on global leadership. Project over, Souter asked to be relocated to New Delhi.
After working in the development sector for six years—the Scotsman from France worked for the World Health Organization and the Aga Khan Foundation before joining CEB—Souter found the fast-paced environment of his corporation more rewarding. His speciality lay in number-crunching and data analysis; Nath’s lay in his advisory, management capabilities.
They also discovered a shared love for video games. “Alex is a Fifa fan and I get creamed at that every time. I think he has a trick that I haven’t figured out,” laughs 32-year-old Nath, who prefers first-person shooters like Battlefield and Call Of Duty.
“Alex and I discussed various other ideas before we settled on what is now Overcart. Being “corporate-types”, we would build business plans and assess those opportunities from all angles and then reject them. Eventually, we decided to scrap the research and dive into a problem we faced ourselves: the high prices of gadgets,” says Nath, who chose to move from his “cushy consulting job” because “corporate jobs don’t give you stories to tell your grandkids”.
The e-commerce site helps manufacturers and big retailers sell unboxed and refurbished gadgets such as mobile phones, laptops, accessories like consoles, eyewear, headsets and speakers, besides used video games, and hopes to give a fillip to the secondary electronics market in the country.
Unlike other websites like OLX and Quikr, for instance, Overcart follows a unique business model. It obtains its goods directly from retailers (e-commerce sites) and manufacturers, not end-users. “We help companies who are stuck with products that they cannot sell. We act as a marketplace and sell those products directly to end consumers,” says Souter.
Thus was born Bootstrapp, which sold high-end smartphones like the iPhone, besides new and pre-owned video games. But the name didn’t catch on. “We heard our customer service personnel spell the word with a single ‘P’ and that’s when we realized that we should change the name. We didn’t want to spell Overcart with a K, but we bought the website with that spelling as a precaution,” says Nath.
In June, Overcart received a second round of investment from Bangalore-based serial investor Krishnan Ganesh; they had already raised $25,000 (around Rs.15 lakh) through GSF Accelerator, a start-up incubator founded by Rajesh Sawhney, and a host of angel investors, including IndiaMart founder-CEO Dinesh Agarwal and ixigo founder-CEO Aloke Bajpai.
Souter says the money will be used to expand operations. They plan to open offices in Bangalore and Mumbai by the end of the year, and expand their reach to tiers 2 and 3 cities, which account for 40% of their sales currently.
Osama Manzar, co-founder of Digital Empowerment Foundation, a not-for-profit that aims to bridge the digital gap between India’s rural sector and metros, says that while a market for second- and third-hand gadgets exists, there is a “high level of mismatch between medium and market”. Manzar also brings up the important point of accountability. “There is no standard for quality checks of gadgets and electronic devices.”
Souter and Nath agree that there are no guiding benchmarks for quality checks in the secondary-gadgets market, which is nevertheless growing rapidly: Overcart’s sales itself have increased five times in the past five months. “Everyone in this segment is growing so rapidly. We’re already in talks with a player to leverage our knowledge around quality checks,” says Souter. In the meantime, they’re perfecting their distribution network, having tied up with courier companies like Blue Dart, among others.
An Android mobile application created by their team helps them determine the “health of the device”, such as whether the touch screen is responsive (usually a software issue) or the microphone volume low (which could either be a software settings issue or a signal to replace the mic). For iOS and Windows devices, they have a check-list for their five-member quality-check (QC) team.
The site offers this app to retailers and helps teams at official service centres refurbish gadgets for a fee. “These refurbished products are also the ones where we make the most money for the client. For instance, if they liquidated them in bulk, these products would have sold as scrap. But we are able to sell them as refurbished for much higher realization,” explains Nath.
A refurbished piece refers to one that has been repaired to mint-new condition, whereas an unboxed product is one whose seal has been broken but which has been returned to the manufacturer without being used (which may happen if the wrong product has been shipped to a customer).
The company warranty is also made available to their customers. All the pieces are sold with heavy discounts. For instance, the site lists an unboxed Apple MacBook Pro 15, available for Rs.95,000, 23% cheaper than its market price, besides three pre-owned MacBook Pro laptops available at discounts ranging from 33-43%. All goods go through a quality check, which the co-founders call their website’s “value proposition”. Unlike the grey market, where the quality of goods on offer is not only suspect but also often comes without warranty and a bill, the secondary market sells goods whose authenticity isn’t in question.
“We are both big car fans, especially classic cars, so we had toyed around with the idea of importing classic cars from England/France. That’s something we’d love to do at some stage,” says Nath. “More realistically though, we have created a lot of IP in the form of data, analytics and mobile applications, all of which can be monetized in different ways. It isn’t something we aggressively pursue right now, but that alone can be a different business in the future,” adds Souter.