Cashify has been having a good run in the Indian market. The startup that enables you to sell your old mobile phone online in ’60 seconds’ has also recently setup offline kiosks to further simplify the process. The average upgrade cycle for mobile phones has come down, which means a person is more likely to buy a new phone within a shorter span of time.
The old phone, however, may still be a very capable device and can be used by someone else. Cashify completes this process by first buying the mobile phone and carrying out any small repairs that may be needed. The old phones are then sold across India to customers looking to buy a second-hand phone or to businesses that give out phones to their employees.
Last year, Cashify had brought in Chinese recommerce giant AiHouShou as a strategic investor with the aim to expand its international presence. On the sidelines of the recent TiE Delhi-NCR India Internet Day, Mandeep Manocha, Co-Founder & CEO, Cashify spoke to ET on how the company is cashing in on the current aspirational wave riding high in the country. Excerpts:
The Economic Times (ET): What is the plan for Cashify this fiscal? Are you ramping up your offline presence?
Mandeep Manocha (MM): We are focusing a lot on offline retail expansion right now. Primarily we have been an online brand, but in the last one year, we realised that customers are everywhere so you can’t just be focused on getting customers online. We started opening a lot of offline stores and also have small outlets in a lot of metro stations and malls.
Right now we have 23 such outlets in three cities. We plan to open 50 by year-end and will take this number to 200 by next year. That is one of our major plans – opening a lot of customer touch points to buy back old devices plus we want to build these offline stores as an infrastructure to sell a lot of adjacent services like getting a phone repaired. One can get a phone repaired in these stores or buy accessories too. Cashify, actually, in the next 12-15 months will reposition itself from just a buyback company where we buy devices to somebody who is a friend for life. So the moment one buys a phone to when one wants to again sell it, we will cover the entire spectrum like preparing accessories, insurance etc.
ET: How has business grown for Cashify and what are the numbers you are doing currently?
MM: Currently, we are handling 150,000 phones per month. Last year in May, this number was at 50,000 and in the next 12 months we plan to double it. So by May 2020, we expect to scale this up to 250,000 per month. Xiaomi phones see the largest volume in this segment followed by Samsung and Apple.
When it comes to sales, we serve a few startups – food delivery companies and cab aggregators. Besides this, there are customers in different tier 2 and 3 cities as well. We have our selling offices in 14 cities across the country and at present we have 24 offline kiosks which we plan to increase to 50 by December.
ET: Is Cashify planning to diversify into other verticals as well?
MM: We have started a service called ScreenPro which does at-home screen repair. We will be adding more parts in that such as battery repair, camera repair and the like. We are on the brink of launching Cashify branded accessories like data cable, charger, earphones. Very soon, we will be launching insurance products too. It will primarily be focusing on screen protection since that is the major use case when people claim for insurance, so we are just building a product on screen replacement. Since we do screen replacement in-house, that’s a product that we will be launching pretty soon.
ET: Does Cashify have specific initiatives lined up for SMEs and startups too?
MM: We work a lot with startups where we sell them second hand refurbished cell phones and laptops. A lot of large startups which are no longer startups keep buying refurbished devices from us for their sales-force and logistics staff because all cab hailing apps work on mobile phones and it makes sense for them to buy refurbished mobile phones. A lot of delivery companies buy from us. So we don’t specifically reach out to the startups, but we have seen a lot of inbound traffic because they want to cut down the costs.
ET: The buzz around refurbished phones continues to build up in India. What kind of growth do you anticipate for Cashify going forward?
MM: We hope to grow around 200-300% this year. Our internal target is to grow 2.5 – 3x this year. Last year, we grew 2x. More and more people are buying new devices and the lifecycle of phones is becoming shorter and shorter. So macro economically it makes sense for us. On an average, people are selling their devices every 15 months even though a mobile phone has a lifecycle of at least 3-3.5 years. People are aspirational; they want to move from one brand to the other. Mobile phone has now become a part of your accessory. One wants to look good, wear good clothes and even buy a new phone. They want to upgrade pretty often and show off. So there is a large supply of devices that is coming in to us and bulk demand because smartphone penetration is only 35% even today. A good 65% is still moving from feature phones to smartphones. Refurbished phones make a lot of sense in such a scenario.
ET: In what way does Cashify get the ratio right in its gender diversity at the workplace?
MM: In our backend operations, we are hiring more women. If you visit any of our warehouses, we are increasing the number of women who work there primarily because the efficiency is much higher than when we are hiring just male. We are not doing it from the diversity point of view. It is not just that we want to add more women – It makes business sense for us. We have seen more efficiency. Right now it is 27% women, which we plan to take up to 50% by the end of next year.
We had no women in our warehouses eight months ago because typically, it doesn’t strike that one can include women in the warehouse in back-end jobs too. We build our own training academy internally where we hire women and we train them on how to repair a mobile phone. We tried this out and it worked out and whatever investments we made are paying off.
ET: What are the international expansion plans for Cashify at this stage?
MM: Last year, the Chinese company AiHouShou invested in us and we have been learning a lot from them in terms of our backend operations and all the offline stores. Actually, the offline inspiration came from them since that worked pretty well for them in China. They have around 400 offline stores. We are getting a lot of technology transferred from the backend – how to refurbish phones better, how to increase efficiency, how to bring automation in our backend operation centres. In international markets, we are still testing a couple of markets, but can’t reveal much on that right now. We have started test pilots in some markets. Maybe in another six months, we will come out with something.
ET: Did the new FDI regulations have any impact on your business as an online marketplace firm?
MM: Fortunately or unfortunately, whatever the guidelines are, it is only focused on ecommerce and whatever industry is developed. There is nothing on recommerce. But the good thing is that the government is actually focusing on our industry as well. We saw that in the GST implementation. Our industry actually benefited from GST because the government introduced a scheme called the margin scheme. Had there been no margin scheme, this industry would have died. From the FDI point of view, we are affected, but not that much. For us, the setback that came in February was because we work very closely with the ecommerce companies to drive their exchange programmes. So their business was down and that, in turn, affected our business. However, that was only for a month and the ecommerce sector is now back again on the track and so are we.