Wednesday, September 21, 2005

Seconds market

The "seconds" business is an amazing business. Both from the perspective of the customer and the seller. Seconds, from the perspective of the end customer can be hardly distinguished from first quality stuff. What distinguishes firsts from seconds can be as simple as a thread that is raised, a small missed stich or a small deviation in the usual button settings. Only the sharpest quality eye can detect it. It could be designs that are out of production, therefore odd lots of last seasons prints or watch designs could find their way into the seconds market. So, the end customer gets a 30-50% mark down while the company gets back good value (atleast the cost) on what is essentially a reject.

Megamart used to sell seconds of Arvind brands (not sure if they still do so), Titan had a few factory stores. Both these places offered trememdous VFM until a few years back. JK (of woolen blankets fame) had a seconds store at its Thane unit which was quite sought after since they sold blankets at almost a 50% discount, which was substantial.

This is the organised part of the seconds business. There is an unorganised part too, though I am not sure of how it flows from organised to unorganised. Look around markets (I have seen it in a couple of cities atleast) and you will find men selling banians (usually) of some the better known hosiery brands, on bicycles. These are seconds, and I suspect, more "thirds" than seconds. With these, the margin for error is higher. A 90cm marking could be a 100 or 70 or the length could be really long or the cut could be markedly defective. Yet they sell well. For about 20 a piece they are about 1/3rd the price of a regular banian (vest). And make no mistake, it is not just the poor who buy it, for some of the middle class too, it is a good bargain.

Apart from this there are export rejects and surpluses of the unorganised sector, though going by the quality, I am not sure how many of these are actually exports of any sort.

In pockets of Bombay you can get unwrapped soaps with a few chipped edges, or disfigured names but the same fragrance as any of the well known brands. It is claimed that these are seconds/rejects too, but I suspect that this is one seconds market which has more to it than meets the eye.


Kaps said...

the interesting point to note about seconds is the formation of clusters like Marathahalli in B'lore which has outlets which deal in all brands of seconds.

simoncadbury said...

this is an interesting post.

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