This Kolkata Based Startup Creates an Online-2-offline Marketplace to Buy/sell Preowned Smartphones With Warranty/insurance

Satanik Roy - CoFounder & Managing Director - HyperXchange
Satanik Roy – CoFounder & Managing Director – HyperXchange

We are publishing an interview of Mr. Satanik Roy, Managing Director, HyperXchange – This Kolkata based startup has created an online-2-offline marketplace to buy/sell preowned smartphones with warranty/insurance.

About the founders 

  • Dipanjan Purkayastha – 15 years’ across US/India in Strategy/M&A/BD. Scaledtech businesses from scratch to hundreds of millions of dollars. Angel Investor, on the Board of several startups.
  • Asish Chakraborty – 6 years’ tech management in top global Tech MNCs. Enterprise Content Management specialist. Multiple project implementations using various SDLC processes like SCRUM and Agile.
  • Satanik Roy – Adept at coding, design, writing and growth-hacking startups. Former Founder and CEO, Appolysus – Tech Adviser at Maptags Inc. and Voyageur Magazine – Vice President at Rotaract Club of Calcutta Metro City – Mechanical Engineering Undergrad – Author of ‘The Classic Retreat of Anarchy.
  • Dwijo Chatterjee – Over 25 years of experience in Finance, Accounting, Compliance Management and Corporate Strategy – Experience across a wide spectrum of industry verticals with diverse business activities in manufacturing and service sector, including start-ups.

What is the problem you are trying to solve? Can you share with us any insights that led you to believe that this is a big enough problem? 
HyperXchange is an Online-2-Offline marketplace to buy/sell preowned smartphones with warranty/insurance.

As new phones launch faster and data get less expensive, demand for preowned phones is skyrocketing. However, the second-hand mobile marketplace is fragmented – and transactions via online classifieds can be difficult/unsafe.

HyperXchange provides a viable alternative- letting buyers discover pre-owned phones online, then moving the process offline to a kiosk or direct-to-home for safe and trusted transactions, along with warranty/insurance.

HyperXchange solves for trust, convenience and price:

  • We recognized pre-owned mobiles as one of the fastest growing CE markets.
  • Mobile phones constitute 22%, the highest share amongst ‘for-sale’ listings in Classifieds.

Market for pre-owned phones 2016:

  • $1.7 billion in India
  • $14 billion across the globe

Inspite of this, we found the following problems in the current structure:

  • Trust deficit – The second-hand mobile marketplace is underserved plus fragmented – and transactions via online classifieds can be difficult and unsafe.
  • Inconvenient – At the same time, we saw declining sales across the board for brick-&-mortar mobile stores as they lost the new phones business to online retailers.
  • Price sensitive – Established phone brands were suffering, as consumers opted to buy cheaper new phones to offset the cost of a shrinking purchase cycle.

We saw an opportunity to solve for all three, by bringing them together!

We decided to retain the classic online discovery model– for broader and more efficient reach. We moved the meeting point offline to a safe, neutral location; and added home pick up and delivery as premium options. We built a standardized, super-fast and easily scalable process to evaluate and certify preowned phones. We created industry-first warranty and insurance products for HyperXchange certified phones. We partnered with leading brands to incentivize the seller to buy a new phone, once he sells his old one on HyperXchange.

HyperXchange Logo

What is the uniqueness about your Startup? 
Most methods of buying pre-owned phones today has significant trust deficit. HyperXchange:
1. Letsbuyers discover sellers online, then transact offline at local HyperXchange centers or direct-to-home.
2. Provides warranty coverage.
3. Brands phone retailers’ under a franchisee ecosystem– faster/stickier growth on variable cost mode.

Unlike typical online classifieds that depend on ad revenue,HyperXchange earns from:
a) Processing fees on every transaction.
b) Margin on warranty.
c) Commissions on new phones sold.
d) Premium charges.

Why do you choose crowdfunding? 
We chose to crowd fund to earn people’s belief in the model on a longer run.

Why should anyone or investor back you? 
HyperXchange allows to upgrade tech gadgets regularly. We are looking for potential backers, who believe, that selling out their old gadget with trust, convenience and price had been an issue and HyperXchange has been the revolutionary concept addressing the fragmented, unorganized and unregulated billion dollar market in India – The Pre-Owned Market.

Where can people back your project?

What would you do after raising funds? 
HyperXchange is a marketplace focused towards consumers and enterprises with high mobility needs, like cab aggregators and delivery services.

HyperXchange launched June 2016 with a pilot in Kolkata across 5 HyperXchange centers. Within the first week, we earned over Rs.5 lakh. In a month, we crossed 10,000 listings and over Rs.20 lakh revenue across 25 HyperXchange centers.

In August 2016, finalized a deal with one of India’s largest hyperlocal delivery provider to supply 10,000 mobiles over the next 3 months, worth Rs.2.5cr. Similar deals in the pipeline with 3 cab aggregators.

From September 2016, we started direct-to-home delivery as premium service.
Our target is to earn Rs.6 crore in Year 1 (growing across 2-3 cities); to Rs.40 crore in Year 2 (launching franchise operations across 25 towns) and Rs.100 crore in Year 3 (scaling franchisees across 100 towns).

In the meantime, the product will grow to include tie-ups with major smartphone brands and introduce other product categories in select international markets; while keeping the basic O2O model intact.

What is the revenue model? What is the logic behind it? What is the model you are following – Free / Freemium / Premium etc. ? Explain your thought process. 
Unlike typical online classifieds that depend on ad revenue, HyperXchange earns from:
a) Processing fees on every transaction.
b) Margin on warranty.
c) Commissions on new phones sold.
d) Premium charges.

Satanik Roy - CoFounder & Managing Director, Dipanjan Purkayastha - CoFounder & CEO - HyperXchange
Satanik Roy – CoFounder & Managing Director, Dipanjan Purkayastha – CoFounder & CEO – HyperXchange

Who are the consumers that you are targeting? How is this going to affect them? 
Discovery occurs through HyperXchange app/website:
– Certification/sale/insurance/warranty happens through offline franchisee network of HyperXchange Centers
– Pick up and home delivery premium option

This would allow us to upgrade both HyperXchange Tech and Franchise network growth.

What is the big picture of your startup? Will it lead to something bigger? If so, how? 
India is on an internet transformation with cashless economy and digital revolution coming being uplifted. HyperXchange will be the forerunner to pioneer affordable tech penetration into the rural India.

What is the success story of your startup in your own words? 
Life as a startup is all about taking one careful step after the other consistent smile, confidence and resilience (and all the while being the brand) I sometimes juggle a lot focussing on the distant vision. This life is not for everyone. You have to be a little bit crazy and have a very thick skin. Be prepared to live from hand to mouth and give your life to the ’cause’.
Any other information about your startup that you would like to share with us.

HyperXchange, India’s first Online to Offline Classifieds play and World’s first C2B Classifieds. Honored as ‘Outstanding Startup in East by Calcutta Angels Startup East Summit 2016’, Declared as ‘Top 7 Start-ups in Start-Up Launchpad 2016’ by The Indian Chamber of Commerce. Nominated by ‘NASSCOM in Product Conclave Bangalore 2016’ and ‘GMIC Bangalore 2016’. Selected in IIT-B TTM 2016. Selected in the Clarion 2016 in Mumbai. Selected in The Pitcher, Istanbul Turkey. Selected in Catapooolt DUMDAAR 32.

Thanks Mr. Roy. Best of luck!

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