Indian refurbished goods retailer Reverse Logistics Corps, which operates under the brand name GreenDust, is in talks with Chinese e-commerce major Alibaba Group for providing services around management of returned goods and re-selling of refurbished items that are sold through AliExpress.com, multiple sources close to the development said.
AliExpress.com, launched in 2010, is an e-commerce service of Alibaba Group where small businesses, mostly Chinese, offer products to international online buyers.
According to sources, the two companies have concluded initial talks and a team from Alibaba Group is likely to visit GreenDust in India soon to see its business and functioning. "The visit was earlier planned for December, but it was delayed due to Christmas and other year-end activity," said a source with direct knowledge of the development. "The team from Alibaba will now visit India in January to meet GreenDust."
Founded by former Microsoft executive Hitendra Chaturvedi in 2008, GreenDust manages return logistics for several original equipment makers such as LG, Whirlpool, Samsung, Lenovo, Philips, and Godrej in India. GreenDust also works with all the three leading Indian e-commerce players - Flipkart, Amazon, Snapdeal - for the same services. The company sells refurbished, surplus and overstocked products at discounts of up to 30-40 per cent on greendust.com.
GreenDust currently has revenues of around Rs 1,000 crore and is profitable. While the company was backed by Mumbai Angels in its formative years, it has raised two undisclosed rounds of funding, one each in 2010 and 2012. According to reports, in June 2012, GreenDust raised $40 million (Rs 171 crore then) in funding from Vertex Venture Holdings, Sherpalo Ventures and Kleiner Perkins Caufield Byers (now Lightbox).
The tie-up between GreenDust and AliExpress.com is likely to be on annual-contract basis, covering most geographies except China, sources said. The US and West Asia would be the key markets for GreenDust under this tie-up.
Alibaba has returns rate of around 15 per cent on an average, industry sources said.
While talks with Alibaba are still ongoing, GreenDust has started executing a pilot project for two large US retailers - Walmart and HomeDepot - where it is handling a part of their returns, particularly in categories such as mobile phones, technology hardware and some niche segments such as bicycles.
"While appliances is a major business area for GreenDust, the company cannot go after that because in the US, appliances work on 110 volts, which would make it difficult to sell them in other markets, especially in developing countries," another industry source in the know of the development said.
GreenDust is not handling returns from consumers for Walmart, but it picks up returned items from the retail major's warehouse, brings them to its warehouses in Dubai, from where these items are refurbished and sold in markets such as West Asia and Africa through online and offline retail channels. These items cannot be sold in India owing to the stringent anti-dumping law in the country.
Walmart's returns are estimated to be at around $8 billion annually.
For this pilot project, GreenDust has so far employed seven persons in the US and 25 in Dubai.