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Using technology to create a new economic model, Greendust’s ambitious founder talks about creating a “parallel universe” where the young and aspirational can sell old products and buy heavily discounted factory seconds.
GreenDust is the kind of business story you fall in love with instantly. Using technology to create a new economic model, the company’s ambitious founder talks about creating a “parallel universe” where the young and aspirational can sell old products and buy heavily discounted factory seconds. Brilliantly imaginative about business and tremendously passionate about sustainability, Hitentdra Chaturvedi’s next move is to take the business he has successfully built in India to the growing middle classes across Asia, the Middle East and Africa, where 80% of the world’s population resides. He describes Greendust as “Genco and Amazon combined”: Genco at the back-end, Amazon on the front-end and reverse logistics as the engine. Or in other words a business that is equally appealing to white good heavyweights like Samsung and LG as it is to the next billion internet users across the world. We asked Hitendra what it’s taken to make GreenDust one of the world’s hottest emerging markets brands.
Do you compete against Flipkart and Amazon?
Actually, Never. We have always seen GreenDust as a catalyst to e-commerce, like the wind beneath their wings. Flipkart and Amazon drive forward sales, we ensure that reverse logistics is not the weakest link in their supply chain. As they grow, reverse logistics does not bog them down. What we do with their returns is very cool! When returns come back from e-commerce, retail or OEMs, they get routed to our “hospitals” (value added centres where electronics are repaired), where these “orphans” get TLC and are made just like new and then offered to customers at an amazing discounts through our integrated online-offline hybrid model. We’re not just another e-commerce company but a totally new kind of a digital business model, and actually the only profitable e-commerce company in the country.
In a recent interview with Madhav Chanchani from the Economic Times, you talked about taking this new economy model global. Is this a model that’s best suited for emerging markets? And are there no competitors in those markets?
Water will always flow downhill and products from developed countries will always tend to find a way to developing countries. GreenDust’s biggest fans today are the young, aspirational and value conscious, also known as the next million internet users in India. And so the natural evolution of our business is to re-create that marketplace for millions of people looking for good value across developing countries in South Asia, the Middle East and Africa. Developing and underdeveloped markets are the natural habitat for GreenDust to thrive.
Local competitors are doing this in some countries in these regions but no one’s done this on a global scale. My vision is to create a global “parallel universe” for value seekers across the world where returns, factory seconds, and surplus items are bought and sold.
Globally, there are large reverse logistics companies like Genco but their DNA is transportation/warehousing. On the other side, there are discount retailers like Dollar Store, TJ Maxx, Marshalls that do not have a value added offering like a reverse logistics engine and are just traders. There are very few business models that have proven an end-to-end digital commerce model in the boring world of reverse logistics that have the capability to scale globally into a consumer brand.
How did you use big data to shape your business when you were starting out? How do you use it in the business today?
Big data is in vogue, and I am a believer, but I have yet to see solutions that excite me. Big data as the name indicates has to manage “BIG” data and that means expensive engine. At GreenDust, we value data but we go after it in bite sized chunks. There are two key pivots to our data analysis: the first is product, the second is the consumer.
I want to talk about the big data on the product side because what we’re doing is pretty exciting and path breaking. To illustrate, let us take the example of a hospital - you go there with a problem, a doctor diagnoses the issue, perhaps does surgery, prescribes medication and rest. In time you recover and are discharged. The hospital keeps a record of your medical history and for the future, can predict to a certain extent the medical course of action you may need to take. We do exactly the same thing with our products. An LG, Samsung, Whirlpool, Voltas, Lenovo product comes through our “hospitals” and we keep tabs on its medical history all the way from the point it comes in through the doors, is repaired and resold in the market. This provides us reams of data that we use to predict faults, see trends in faults, predict repairs costs and spare parts, improve training, and reduce cost.
On the consumer side, we are now actively working towards making this information available to our customers so they can make an educated purchase decision using information and knowledge provided by a trusted source – GreenDust.
Going forward how do you think your big offline presence will shape your business offer versus competitors?
That’s what’s makes the Greendust model so interesting. We combine an offline fulfillment model with online ordering. We have 250 franchisee locations across act as our fulfillment centres where customers can pick up the goods. It’s a very interesting digital economy play and we’re very uniquely placed in India in this aspect.
If you look at Amazon in the US, they are now trying to bring their fulfillment centres closer and closer to the customer to facilitate quick delivery. They can no longer have huge distributor warehouses. In a country like India, having fulfillment centres close to the consumer is even more critical.
60-70% of what Flipkart’s sells today are mobile phones. I’ve been told that their average ticket size is ?700-800 ($11-13) and I’m pretty sure Amazon is in approximately the same range. This is another area where we distinguish ourselves. Our average ticket size is ?7000 ($110). Our offline fulfillment capabilities allow people to buy things like washing machines and fridges from us allowing our ticket size to be so much larger. It’s not like Snapdeal or Flipkart can’t sell these items, it’s just an extremely expensive proposition for their business model because they have a central warehouses structure.
Looking back at the time when you started, what were the most important things when you were building your business? Team? Product? Passion? And if you were to give advice to young entrepreneurs today, what would you say are the most important things they should think about?
As a student when I’d hear business leaders talk about what I thought were corny business mantra’s – “ideas are dime a dozen”, “people make company a success”, I’d think that now that they are successful, they’re espousing ‘gyan’.
But today as I live and breathe the entrepreneurial life, I realize the depth of these statememts. When I first started GreenDust, I had world-class experience under my belt having worked at E&Y, AT Kearney, and Microsoft but no knowledge of what it took to work in India. As it turns out, my ignorance worked in my favour. It made me ask all the right questions, and never to take no for an answer.
I’d put passion right at the top of the list. I remember when we had just incubated GreenDust, I needed to hire operations, sales, repair, and logistics professionals from junior level to senior. In the supply chain industry, many are so set in their ways that convincing them to destabilize their life, jump ship and help change the world can only work when your own passion starts to become contagious.
I’d never have thought it, but today I often find myself quoting Mark Twain. He said twenty years from now you will be more disappointed by the things that you didn't do than by the ones you did do. So throw off the bowlines, sail away from the safe harbor. Explore. Dream. Discover.
A close second is your team. The job of the founder should always be to hire people who will one day make him or her obsolete and redundant. This is a powerful statement for many in India but to build a great organization a founder will have to let go one day. Just like raising a child – in the early years the child is completely dependent on the parent for everything but if nourishment, schooling, values is good, the child grows up into a responsible individual with his or her own personality. The biggest joy of a parent is that they be known as parents of successful progeny. Entrepreneurship is the same. If founders have build a solid foundation of right team, culture, values, and support system, the company, like an individual will flourish and leave a legacy behind.
What makes the GreenDust work culture distinctive?
It’s a very green culture. We’re big believers in the five R’s – reduce, reuse, repair, recycle and resell. And we attempt to spread that culture amongst our customers. We sell on value but want to give customers something interesting to think about. I think we’re making green “cool” for young India.
We also have a work hard, play hard attitude which is basically about having fun and building a workplace where everyone is happy and excited everyday. What I am trying to do is blend western and Indian working styles and we are seeing some amazing results. We are one of the few start-ups that actually have a Vision, Mission, and Values and it is communicated to all employees. Our values form our DNA.
One thing I haven’t been able change is being called ‘sir’. I’ve begged everyone to call me Hitendra but it has only worked to a limited extent.
Is there a unified understanding across the business about the ambition for future?
It’s the job of the management team to make sure that everyone knows how they fit in to the larger picture and to take everyone along with them on that journey. I make a conscious effort to have personal relationships down the ranks. Everyone has my phone number. On several occasions, my managers (who had traditional manufacturing industry backgrounds) have been vocally angry with factory worker who had called or approached me directly. I blasted these managers and made it clear that I didn’t want to be disconnected from reality in an ivory tower.
That was not the kind of spirit I wanted at GreenDust. I wanted anyone in the company to be able to reach out to me just as easily as I want to reach out to them.
I make it a point to wish every employee who has a birthday or a work anniversary as it makes them feel special. I am happiest when I see emails announcing that an employee has completed 1,2,3,4 years in the company. That tells me that GreenDust is now a career of choice. My aspiration is one day to have GreenDust on top of the Forbes “Most Admired Company to Work For.”
What’s the most important part of your job?
I think it may be shaping the culture for GreenDust and building a team that will make me redundant...eventually. Today most of the time is spend on operational issues, business development, and investor management but I try not to lose focus on what has turned promising start-ups into great companies – culture, and people. It is hard work when you have revenue pressures, investor pressure, fund raising pressure, salary pressure but it has to be done and the only one who can do it is the founder. In India we also have a culture where we blame others very easily but are very stingy with praise. I am trying to build a culture where we praise people on a job well done, we motivate them, we respect them, and we empower them. It is also important for a company with global aspiration to build a globally inclusive culture and that is my focus. If we can make GreenDust a happy place to work the company will touch the stratosphere!
The Indian ecosystem lacks market consolidators. But that could change imminently.
It’s really hard, but so powerful. The "hack" culture of Facebook or the "do no evil" approach of Google or the "respect everyone" culture of the Mahindras. It is amazing to see what great things can be accomplished when a founder drives core values effectively through an organization.
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