Learnings & Insights from our Journey thus far
Let me start by giving some context.
We have been building Koove — A social platform for used goods. There are three parts of building Koove. One part is the evident Android application.
The second part is the large communities, we have built on Facebook. These communities are across 15 cities, having more than 600,000 members. On an average, we see about 800 posts, 500+ transactions, and 5000+ engagements daily. We do not have a means to track chats, our guess would be about 600+ unique conversations daily.
The third part is the offline “Declutter Sale” events which we are currently doing in Bangalore. The last event was in July 10th. We had 60+ families decluttering their stuff, and 15,000+ visitors coming and attending the event.
We are able to gather a lot of data, understanding and a generic sense of the direction in which the market is going. This is an attempt to share some of these insights, hoping it will help others.
The TV ads being run by both Olx and Quikr have done a great job. There is increased awareness among people. Even 5 years back, people did not knew what to do with their old and used stuff. Today they know they can sell them on online platforms.
Supply or Sellers:
In a survey by Olx, they have claimed that Indians have about 78,300 crores of used goods in their homes. This is a mind boggling number. The interesting fact is, out of these, only about 3–4% are getting listed today. That means a good 96% of them are not getting listed for sale. This is even more surprising.
So, we spoke to 1000+ people in Bangalore. While everyone knew about Olx, Quikr, or even our FB groups, they were not listing for some reason or the other. This is where we realised that awareness is not really the problem, the problem is something else.
Our next step was to start our offline “Declutter Sales” event. We got queries from over 1000+ families interested in decluttering, across just 3 events. We could accommodate only 220 of them in these events.
In our events, some families had decluttered more than Rs. 15,000/- worth of items, in a matter of few hours. On purpose, we were not having Mobiles, electronics, or other gadgets. Also, for logistics reason, we could not include furnitures, and vehicles. (Btw, the categories which we did not allow are actually the most listed items on online platforms.) Clothes and Accessories comprised of 80% of the items in our event. Its evident, we buy a lot of clothes and hoard them.
We got a lot of insights and data, having interacted with these families decluttering. Interestingly, less than 4% of the items in our event, were listed online. I can not share the other insights, on why people are not listing on platforms at this moment. Hopefully, I will share them in sometime.
Demand or Buyers:
The other most important insight, was about the demand or buyers. And IMO, this is the biggest problem in the sector, which needs to be solved for.
In the survey of the 1000+ people we had, almost everyone said they are aware of the online platforms where they can sell their used products. Very few of them had actually visited any of these platforms. Those who had visited were for the purpose of selling. 99% of them never went to buy anything nor are interested.
The social stigma attached to used goods is quite high. Some people actually said, they delete the used goods app, as soon as they sell their stuff. They don’t want their friends to know they visit them, lest they get wrong impression.
Along with this comes the notion that used goods is generally bad. People don’t sell the products till they upgrade to a new one, or it starts giving problem.
There are a few thousand users who are open to trying out used goods online. Less so in segments like fashion, accessories, home decor, etc. They are quite comfortable with vehicles, somewhat comfortable with mobiles & electronics, and confused for furniture (discounts on new furniture comes to about 40%, while used are available for 50%. )
Limited Market with high CAC:
That leads us to a place where the willing market size is actually limited. There needs to be an effort to educate, and move the addressable market towards willing consumers.
While we all know the cost of e-commerce acquisition is high, the cost of acquisition for used goods is about twice that amount. This cost is going to increase further at scale, may go upto 3X the current acquisition, i.e. 6X the current e-comm acquisition cost, primarily due to the limited buyers market.
Is it all Gloom and Doom?
Not really. There is hope.
Changing someone’s behaviour which has been going on thru generations is not going to be easy. It is going to take time. IMO, it is going to take a different approach, not the usual e-commerce style bombarding buyers to come and buy. Discounts can only take us so far.
Powered with all these insights, we are building Yappily.
We were always building a Social Platform for Shopping. Our goal is to get all the people and the top brands to be engaging with their buyers and enabling them to buy easily. While some may say this is a Pivot, we believe it is the same goal and vision, with a bit different approach. Anyways, Pivot or not, does not really make any difference. Solving a problem is what we are after, and we are committed to solve that.
What is Yappily?
Flipkart and Amazon are like the Google of e-commerce. People come, find, buy and get going.
We are building the Facebook for E-commerce.
Wish us luck. :)
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