 "This e-commerce site gives big discounts and still makes money. It just bagged $6 mn")
An unboxed sofa from Urban Ladder, one of the coolest furniture portals in India, is available for Rs 6,000 ($88.5) on Zefo, an online marketplace for used or returned goods and factory seconds. That’s a 70 per cent cut on its original price of Rs 20,000 ($295).
I was sorely tempted to buy it. 'Unboxed' means the sofa hasn’t even been used. It’s a discard because of a defect. Zefo tells me upfront that it has a minor leatherite cut at the side and an ink stain on the arm rest. Not an issue for me because I know Urban Ladder makes good furniture. Besides, Zefo guarantees a buyback for Rs 4,200 ($62). So I risk little if the leatherite cut becomes hard to contain later.
Many others, especially millennials, apparently have the same idea. Zefo, founded last year, says it is currently growing at 40 percent month-on-month, and selling 400-500 products a day. The Bengaluru-based start-up recently expanded to Mumbai and Delhi.
Today it announced series A funding of $6 million led by Sequoia Capital India with participation from Singapore-based Beenext and existing investor Helion Ventures. The funding will go towards expansion to more cities and entry into more categories.
Currently, Zefo sells furniture and household appliances. Consumer electronics will be added soon, says Zefo co-founder Rohit Ramasubramanian.
A number of factors have contributed to the fast-growing popularity of Zefo. The buyback guarantee gave a big boost, for instance. “We saw a 40 percent increase in conversion rate,” Rohit tells me. It also creates a long-term engagement with the customer who becomes both a buyer and a seller on the site.
This is an excerpt from Tech in Asia. You can read the full article here