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.
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!
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