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Electronics Bazaar
Refurbished Franchisee Store
Electronics Bazaar
Refurbished PCsMetro Franchisee Store
Refurbishing Facility – Video
(Click below to play)
Source: YouTube
Refurbishing Facility (1/2)State-of-the-art 30K sq. ft. factory established in Nerul, Navi Mumbai
Source: YouTube
Refurbishing Facility (2/2)Refurbishing Process in action
Source: YouTube
Retail Outlet ExperienceOutlets running in Mumbai and Bangalore
Source: Management Data
Business SnapshotElectronics Bazaar – Leading Player in the Refurbished PC Segment
Huge Untapped Market
► Refurbished PCs are thoroughly tested and verified to function as good as new
► $3.1 Billion potential market size by 2023
► Current market size of refurbished PCs - 4 Million Units
► PCs are not used to their full potential hence extending their lifecycle can enable further usage
Product-Market Fit
► Largest organized brand in the refurbished PC market
► Refurbished PCs cost 60% lower than new and are of same or similar quality
► Retail model avoids unnecessary expenses and enables physical interaction with product
► E-waste management and reduction in carbon footprint
Unique Positioning
► Largest Microsoft Authorized Refurbisher
► State-of-the-art refurbishing facility that can churn 30k units
► 1 year replacement warranty with customization services
► Exclusive retail outlets High Margin Business
Expansion Plans
► Open 400+ retail stores – both owned and franchisees by 2023
► Scale up operations to 19 cities
*Run-Rated over Apr 2018 to Oct 2019
$3.1
Bn30K
60% 43x
Source : Microsoft Report
Product PortfolioLaptops and Desktops
Source: EMIS Report, BusinessWire, ET, Zinnov Analysis
► Refurbished PCs are priced at 60% lower than new PCs and function as good as new thus making a strong value
proposition – more and more people are opting for refurbished PCs
► Under EPR, the government mandates manufacturers to responsibly recycle 1/3rd of old PCs
► Small & Medium Enterprises and Education Sector to drive demand
► Directionally, GoI is pushing adoption of refurbished PCs to reduce e-waste, carbon footprint and CapEx
Laptops Desktops
Refurbishment – an underserved market segment of PC industryCustomers plagued by lack of transparency, awareness, limited selection and no quality assurance
Unorganized
markets & lack of
standardization
E-waste Disposal Pure play online
model High IT Capex
Refurbished PC space largely driven by unorganized local
retailers with many lacking the ability to completely transform the
product and give it a complete ‘new’ look and feel backed with warranty and superior services
attached
Online model does not address all customer concerns
As Product is refurbished customers prefer to feel the product and buy, instead of
buying it online
IT is a sizable chuck of any company’s expenditure
20-50 million metric tons of e-waste produced worldwide every
year
Lack of IT asset recovery firms with a proven track record
capable of unlocking remaining value of IT capital assets and/or stipulate with local laws of solid
waste management
Product-Market Fit: Promoting recycling of Surplus IT Assets
Consolidating &
Standardizing
unorganized Market
Gov. Certified
Refurbisher
Omni-Channel
Retail StrategyReducing IT Capex
No.1 brand in refurbished PC space providing access to quality
refurbished products with comprehensive warranty at
affordable prices
Extended Producer’s Responsibility
Issued by Central Pollution Control Board (CPCB)
Consent to Operate
Issued by Maharashtra Pollution Control Board (MPCB)
Capacity to refurbish 30K units per month
Many lack the ability to completely transform the
product and give it a complete ‘new’ look and feel backed
with warranty and superior
Easy to scale & high-touch model addressing customer concerns regarding lack of
transparency, quality assurance, and uncertainty of
a gadget’s authenticity
Budget conscious MSMEs and Start-ups can optimize their IT
investments by opting to purchase refurbished
computers from Microsoft Authorized Refurbisher-
availing savings on hardware & genuine software licenses
Refurbishing Market Trend in Consumer ElectronicsThe refurbished category is growing 4x on a Y-o-Y basis
Popular Refurbished Product Categories
Refurbished smart phone volume grew by 25% in
2017 crossing 12 million units
Cons. Electronics & Computer dominate
Electronic segment
Source: BusinessLine - April 30, 2018; The Economic Times - May 23, 2018; Deloitte Report – Feb, 2019
Growth in business activityAspirational Purchase at
affordable prices
Improving awareness among
millennials
Ecosystem of service providers Organized sellers strengthen
supply
Certification process,
Warranty & Packaging
Drivers
PC Market OverviewPCs comprise of desktops and laptops and form a $10 Bn Market in India
Global IT Hardware Market
$295 BnBy Value
(2018)
Indian Refurbished PC Market
$850 MnTotal Market Size (Value) in
2018
4 Mn(Units)
2018 Market Size
30% p.a.
$3.1 BnTotal Market Size (Value) in
2023
14.85 Mn(Units)
2023 Market Size
Indian PC Market
Source: Microsoft Report, BusinessWire, ET, Zinnov Analysis
$10.4 Bn2018
$13 Bn2023
CAGR ~ 6%
Market Drivers for Refurbished PC MarketAwareness is a major factor driving the Refurbished PCs Market growth
Rental vs
Upfront
Payment
Value for Money
Product
Stringent
Quality Test
Better
Customer
Experience
CSR Activities by
large corporatesHigher Margins
• Replacement warranty enhances attractiveness
• Rental PCs, nearly 30% of the overall Refurbished PC market are
driving sales of refurbished PCs
• EMI facility also offered
• Retailer margin on refurbished PCs ranges from
15-25%, higher than their margin on new PCs
• High profit margins encourages push for
refurbished PCs
• Warranty being offered to customers
• Electronics Bazaar selling Refurbished PCs with 1 year
replacement warranty
• Customers can get product for 60% lower price of new
with comparable quality
• Refurbished PCs are as good as new
• Several corporates have been donating refurbished
PCs to NGOs/ Educational institutes from their CSR
budget
• Corporates either procure directly from refurbishers or
via beneficiary entities
• Electronics Bazaar follows stringent 21-step refurbishing
process, providing good quality refurbished PCs to
customers
• E-Commerce players like Amazon are helping improve the
awareness of refurbished PCs
Source: Zinnov Analysis
Market GeographyShare of top Indian cities in refurbished PC Market
Low
High
Po
pu
lati
on
(in
Mn
)
HighLow Internet Users (in Mn)
Number ‘X’ indicates City-wise rank based on number of Refurbished PCs Sold (Sell-through)
Delhi NCR
Bangalore
1Hyderabad
4
ChennaiAhmedabad
Pune
Kolkata
8
Surat
Lucknow
Coimbatore
Jaipur
Mumbai
106
7
3
12
5
4
1
8
9
2
11
X
West
East
South
North
Source: Zinnov Analysis
Regulatory EnablersGovernment Policies promoting usage of refurbished computer systems
Transforming India into a digitally empowered and knowledge economy will require a plethora
of hardware systems and the government is promoting used or refurbished systems for the
same
Build a strong eco-system for nurturing ‘innovation’ and ‘exponential start-ups’ shall encourage
growth of Small and Medium Enterprises which are crucial customers of refurbished computer
hardware and peripherals. We are seeing trends of Start-ups buying Refurbish laptops over new
laptops in our outlets.
The Ministry of Commerce and Industry has permitted import of refurbished and second hand
electronic items subject to registration with the Bureau of International Standards and
compliance with labelling requirements and these items can be refurbished and re-exported to
international markets
State governments being encouraged to adopt the Public Procurement Order 2017 for the
procurement of electronic products along with leveraging Government e-Marketplace (GeM) to
expand the market for domestically manufactured electronic products
Preferential
Market Access
Removing Import
Restrictions
Start-up India
Digital India
Source: EY Analysis
Case Study: Micro CenterLeading refurbished computer retailer in the US
25 Large Stores(high volume) operational in major
markets across the US
Since 1979, Micro Center has served over 22M customers till date across USA, with a turnover ~ $3 Bn (FY19)
30,000+ itemsIn stock at their high volume retail
stores
Omni-Channel PresenceFacility to order online also available
apart from retail outlets
Sales Associates1Micro Center hires computer and electronics enthusiasts and provides them continuous
continuous training to ensure that customers receive an outstanding constative sales
constative sales experience
A large fully-staffed counter area where customers can bring computers for one-on-one technical
one-on-one technical support, quick upgrades and other personalized help sessions
Unique Store Features
Micro Center
Knowledge Bar 2
75%Environmental Damage done by a
PC occurs during its production
1.35 mt tonnesCarbon Dioxide emission being
released can be saved by the
reuse of a single PC base unit and
screen
20xReusing PC is 20x more effective
at saving energy than recycling
materials for re-manufacturing
Environmental ImpactRefurbishing a PC extends its life thereby reducing burden on the environment
Source: PureIT Dell, BBC
150 kgCarbon Footprint Produced while manufacturing a new laptop
E-WasteRefurbished PCs can resolve environmental hazards posed by dumping of e-waste
Computer refurbishment is the most environmentally sound form of computer recycling and a valuable source of IT equipment made available at
low cost
These would have ended up in landfills otherwise creating 20-50 million metric tons of e-waste worldwide every year
12.5%Percentage of e-waste being recycled currently
Warmed up e-waste releases toxic chemicals into the air damaging the
atmosphere
E-waste thrown in landfills causes toxic materials to seep into
groundwater affecting both sea and land animals
Refurbished Device JourneyEach device undergoes a stringent process before it reaches the end user
Screening of Products (Asset Verification Test)
Pre-repair check:
• Inspection
• Assessment
• Grading
21-Step Refurbishing Process making the product
as good as new
Post-Repair Quality Checks: Burn Test and Final QC
Packaged EB Certified PCs sold with 1 year
replacement warranty
Source: Management Data
L1 Repairs L2 Repairs L3 RepairsL4 Cosmetics and Refurbish
Refurbish
• Software Reinstallation
• Reset Settings
• Small parts replacement • PCB Chip repair level • Top and back cover changed
changed
• LCD Refurbished
Stages in the Refurbishing Process
Business ModelDistributor Business and Retail Outlets
Procured from:-
Corporates
OEMs
Customer
Franchisee Stores
EB procures used products from various sources through contracts and tenders or partnerships (in the case of OEMs)
Key feature of the new EB exclusive stores: offer the advantages of Online model with
the additional benefit of retail availability to browse, touch and feel the EB
refurbished product
30K sq. feet world-class facility in Mumbai which can
refurbish 30K units per month
GRADE A
REFURBISHING
Microsoft Authorized Refurbisher
Source: Management Data
Own Store
Outlets
Government
City-Wise Outlet Expansion PlanTargeting 430 Stores across 19 Cities by 2023
Ahmedabad
Mumbai
Bengaluru
Hyderabad
Chennai
Delhi, NCR
Indore
Chandigarh
Jaipur Lucknow
Surat
Nashik
Pune
Nagpur
Raipur
Vadodara
Bhopal
Kanpur
Kolkata
Cumulative
StoresMar-20 Mar-21 Mar-22 Mar-23
Metro Cities 50 110 170 170
Tier-1 Cities 9 69 129 249
Total 59 179 299 419
Source: Management Data, EY Analysis
Own & Franchisee Outlets
Only Franchisee Outlets
Kay Kay Overseas – Group OverviewIndustry Veteran with an experience of 25 years in the PC market
KKOC was founded
as a distributor of
computer,
computer parts
and peripherals
Became Samsung’s
largest IT partner in
India
Became HP laptops’
largest partner
1st and largest
distributor of Dell in
India
Compuindia was
founded as an
exclusive partner for
Dell for their online
business
B2B E-Commerce arm
founded
1995 2000 2005 2008 2012 2014
Timeline of operations
2018
Electronics Bazaar
became the biggest
Microsoft Authorized
Refurbisher in India
One Time Cap Ex
Electronics Bazaar
Franchisee
Head INR
Branding & Furniture 7,50,000
Head INR
Civil WorkWhite box with False Ceiling, AC
& Glass Front
7,50,000
Others Franchisee
Inventory INR
50 Pcs 10 Lakhs
Rental Deposit INR
6 Months 4.2 Lakhs
Revenue Ramp Up
3.83
5.02
6.65
8.62
11.76 11.76
MONTH 1 MONTH 2 MONTH 3 MONTH 4 MONTH 5 MONTH 6
Revenue (INR Lakhs)
Revenue (INR Lakhs)
Revenue Break Up
Month Laptop Units
Laptop ASP
Desktop Units
Desktop ASP
Total Revenue
1 18 19750 2 13750 383000
2 23 20000 3 14000 502000
3 30 20250 4 14250 664500
4 39 20250 5 14500 862250
5 51 21000 7 15000 1176000
6 51 21000 7 15000 1176000
Franchisee Outlet P & L
-150
-100
-50
-
50
100
150
-60
-40
-20
-
20
40
60
80
1 2 3 4 5 6 7 8 9 10
Month of Operation
Net Profits - Metro(INR ‘000)
Profits Cumulative Profits
Break Even
Profitable
P&L Break Up
Month RevenueFranchise Margin
(15%)Rent Salary
Electricity & Utilities
P & L
1 383000 57450 60000 40000 8000 -50550
2 502000 75300 60000 40000 8000 -32700
3 664500 99675 60000 40000 8000 -8325
4 862250 129337 60000 40000 8000 21337.5
5 1176000 176400 60000 40000 8000 68400
6 1176000 176400 60000 40000 8000 68400
ROI
Year 1 (INR Lakhs) Year 2 (INR Lakhs)
P & L 4.77 7.56*
CapEx (incurred by Frch’ee) 7.50 7.50
ROI 63% 101%
*5% Hike in Rent, Salary & Electricity Utilities Considered
Thank You
Contact
yash.r@electronicsbazaar.com
+91 7977528130/+91 9757407622
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