Making money out of defects

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Hitendra Chaturvedi

How many times have you wondered what happens to your mobile phones or computers which
you have returned due to the device developing a technical snag. Many a times, products
returned by customers due to various cosmetic issues sit idle at the manufacturers warehouse
and take away a lot of time and money. This is where Hitendra Chaturvedi saw an opportunity to
do business and formed a company called GreenDust Pvt Ltd. The company provides the IT/PC
manufacturers, distributors and retailers an alternate organized sales channel.

I have worked overseas for 17 years across 65 countries and I have seen supply chain at various
stages of evolution. Typical definition of supply chain is movement of goods and service from
manufacturer to consumer. But a true supply chain expert knows that this definition is half
right, says Chaturvedi.

NEED FOR THE BUSINESS

According to him between 4 per cent and 40 per cent of products traverse a return journey. This
reverse supply chain or reverse logistics is missed by many companies. India ranks third from the
bottom when it comes to supply chain efficiencies. In countries where supply chain has evolved it
is a best practice across retailers, e-tailers, and manufacturers to focus on forward while
outsource reverse to companies that specialize in reverse logistics. Chaturvedi got the idea for
GreenDust when he was part of the founding team of one such reverse logistics company in the
US. When I came to India and saw the dire need of an outsourced reverse logistics model I
started the company, he says.

GreenDust essentially enables retailers, e-tailers, and manufacturers to focus on their core
competency of building great products and delivering them to their customers while outsourcing
their reverse logistics process. It manages the entire process from customer pick-up, call center
management of returns, warranty management, repair, refurbish, repack of returned items, and
then resale as a refurbished items to end customer.

An engineer from IIT Roorkee, with an MS and MBA from the US, Chaturvedi spent 17 years in
the US working for companies like Enst & Young, A.T Kearney, and Microsoft. He came to India
in 2006 via Micorosft and when the time came to go back to the US he decided to take the
entrepreneurial plunge and started RLC and its brand GreenDust in 2008.

India has a return rate of 5 per cent. This means that between $12-$15 billion worth of products
get returned every year. While the opportunity looks big GreenDust had a huge challenge in
educating business partners on the value of reverse supply chain and its strategic importance
because reverse logistics has never been on the CXOs agenda before. Returns were the orphans
that lay in a warehouse in a corner gathering dust and loosing value. Educating companies that
returns were not fine wine took time but once they saw the value it was like a light bulb going
off, says Chaturvedi.

UNIQUENESS OF THE IDEA

The concept of refurbished products is very common in the automobile segment but GreenDust
has brought this to IT and mobile devices wherein Indian customers get an alternative to buying
new products. The refurbished products are authorized by the original manufacturer and comes
with a warranty.

By bringing them back to life from the verge of being scrapped and bringing them lovingly back
to just like new condistion and providing them a new home we have decreased the amount of
pollutants that would gone into the environment, says Chaturvedi. Till now GreenDust has
stopped over 3,00,000 products from becoming scrap.

FUNDING OF THE VENTURE
The company started with seed funding from Mumbai Angels followed by Series A funding from
Kliener Perkins, Sherpalo Ventures and Reliance. Kliener Perkins, Sherpalo, and Vertex invested
in the next round of funding. In three years the company has grown from Rs. 1 crore to
over Rs. 300 crore with the number of employees going up from 3 to over 400.

LEARNINGS
As they say if you have learned to drive in India you can drive anywhere in the world.I say if
you know how to start and sustain a business in India you can do it anywhere in the world and be
extremely successful, says Chaturvedi. He believes that people and team will make or break any
company. Build the best team possible and guide them, empower them, but do not
control/constrict them. Businesess have to prove their merit and slog hard to earn the trust of
their business partners and customers, he says.
GreenDust claims to be among the top reverse supply chain company in India today and it has
global ambitions. Our intent is to go international soon and become one of the few technology
companies that were incubated in India and went onto become an MNC. The next goal is to
become the #1 reverse logistics company for the emerging markets, says Chaturvedi who has set
a target of becoming a $1 billion company in 5 years.

How Gurgaon startup,GreenDust, turns

companies' reverse logistics into happy
returns
By Mamta Sharma, TNN | Updated: Nov 22, 2012, 02.26 PM IST

READ MORE ON whirlpool | Videocon | Toshiba | stocks | startup | Samsung | Reverse Logistics | Phillips | PC |Original
Equipment Manufacturer | Onida | OEM | IT | Gurgaon | Greendust | genuine parts | Electrolux | Amazon.com

The business model of the company is simple. Take the

rejected /defective /unsold /returned products from OEMs, refurbish them, provide a year's warranty from their side, and
sell them as factory seconds through their brand, GreenDust.

GURGAON: Many a times, products returned by customers due to various cosmetic issues sit idle at
original equipment manufacturer's (OEM) warehouse and take away a lot of time and money.
Providing the IT/PC manufacturers, distributors and retailers an alternate organised sales channel
where they can be rest assured that the returned/factory seconds products will not cannibalise their
new product sales is Gurgaon-based reverse logistics company GreenDust Pvt Ltd.

The business model of the company is simple. Take the rejected /defective /unsold /returned
products from OEMs, refurbish them, provide a year's warranty from their side, and sell them as
factory seconds through their brand, GreenDust.

"The product will still be a factory second of LG, Samsung, Sony but when it goes through our strict
inspection process we fix any small problem using genuine parts from the company and put a
'certified GreenDust' sticker on it so that the customer can be rest assured that they are getting a
branded product certified by GreenDust," said Hitendra Chaturvedi, founder and CEO of GreenDust.

Having engaged with reverse logistics business from the past three years, the company has grown its
revenue from zero to over Rs 250 crore. "We have increased our strength of the organisation from 3
to over 400 people and now our attrition rate of less 3 percent," said Chaturvedi.

There are many companies who have understood the strategic impact of reverse supply chain, are
availing the services of GreenDust and reaping huge benefits. GreenDust's clientele includes
companies like Samsung, LG, Panasonic, Haier, Electrolux, Black & Decker, Videocon, Onida,
Panasonic, Phillips, Toshiba, Apple, Whirlpool, Glen, INALSA, HS18.com and Amazon.com among
others.

"GreenDust has helped us tremendously, as these products get recycled and reused. It has cut down
our logistics cost, as well as our overall blocking of capital," said Eric Braganza, president of city-
based Haier Electronics.

When Chaturvedi returned to India in 2006, after spending 17 years working in the US, heading
Microsoft's OEM unit, he had no intention of starting his own enterprise. "However, when I shared
my busness experiences of having worked in a reverse logistics company prior to Microsoft, people's
lack of awareness on the concept itself took me by surprise. It also had me thinking that this was a
gap that I could plug efficiently. India has a return rate of 5 percent. This means that around $12-$15
billion of products get returned every year and we spend $4-$6 billion in bringing it back. What a
huge waste. What an opportunity to improve the process," he said talking about his business logic of
entering the segment.