Updated: June 23, 2022 7:01:03 pm
“No one was solving the problem of facilitating the transfer of an old pre-owned device to a new consumer,” Yug Bhatia, founder and CEO, ControlZ, elaborates on why he created a brand that specialises in renewed phones in India. Bhatia says an average smartphone can easily last between five and seven years, but consumers now use their phones for a year or two and then move on to new devices. Even though everyone is talking about the longevity of smartphones, many users are keen to swap their phones in a shorter time span.
“My thought was, can we do something that consumers aspire to for a product with a greater life cycle?” the 21-year-old tells indianexpress.com over a call. For the longest time, refurbished phones have been seen as a ‘compromise’. This is true to a certain extent. The perception is that those who consider a refurbished device cannot afford a new phone. But even if one buys a refurbished phone, chances are it will have scratches, dents and marks.
Bhatia, who was in the e-commerce business before starting ControlZ in 2020, knew the state of refurbished smartphones and how unorganised the sector was despite its huge potential in a market like India. He saw that the opportunity in pre-owned smartphones was not to sell them as refurbished, but as ‘renewed devices’.
“This has happened successfully in other industries like cars and two-wheelers. But something went off in this category in India, where there is no brand in the refurbishment or renewed segment that sells pre-owned smartphones as good as new ones,” he claims.
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“When you buy a refurbished product, you don’t feel good about it…there is no joy in that purchase,” Yug says. But getting a renewed smartphone is an altogether different experience. Not only does a renewed smartphone come in impeccable condition, but it also performs at par with a new device,” he says.
Renewal is more of an industrialised process, where every step is performed by a different team or individuals as if you were making a new product. Bhatia says his team works on limited SKUs because the entire process is time-consuming and can take months to reach a stage when the device has gone through enough quality checks that it can be sold on the ControlZ store.
“We have a three-step renewal process. All the devices we get are dismantled, reassembled with packaged displays, one of the most crucial parts of a smartphone.”
Bhatia’s current facility has different types of machines that are deployed to do a specific task, like removing scratches from the display or taking off the display. He notes the display itself has eight to nine components, and sometimes when one of the key components is missing or in short supply, it delays the whole process. Every renewed smartphone one buys from ControlZ has a new battery, plus an 18-month warranty.
ControlZ’s business model is based on three pillars: procurement of devices and components, renewing the device and eventually selling the phones to customers. The company has partnered with all majors like Amazon, Flipkart, and Cashify, who buy back phones from customers, and ControlZ then sources these devices for renewal purposes. Once that is done, the team works on reconditioning devices so that they look and perform like new and can be sold on the official store.
But on the ControlZ store, which went live in May, you won’t find renewed phones from every major brand. Instead, Bhatia is limiting it to two brands initially: Apple and OnePlus. “We have to ensure that the phone model we have chosen is supplied by a partner, and components should be available with us,” he explains.
Both Apple and OnePlus have a high-recall and aspirational value, which helps new customers look at renewed phones from a different perspective, he adds.
The iPhone X, Bhatia says, has seen the best response, while the iPhone 7 remains a popular renewed phone on the platform. The range for renewed iPhones starts from Rs 14,999 and goes up to Rs 49,999. In the coming days, ControlZ will start selling renewed OnePlus devices.
Though it’s still early days for ControlZ, Bhatia plans to expand the business in the long run. He is still figuring out how to reach out to more users through offline channels. The current challenge for him is that consumer perception changes when they see a renewed phone online, compared to when they hold it in their hands. Given the better success rate offline, he is looking to go into physical stores faster than initially planned, maybe with pop-up stores across leading retail outlets.
The company recently acquired Overcart, a marketplace for overstock, unboxed, reconditioned, and preowned merchandise, for an undisclosed sum. Bhatia is also building a new facility in Gurgaon and hopes to start operations there as early as October. The company may also look at raising more funds in the future, given the size of the market and opportunities to grow in this segment.
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