“The trouble with the French economy” president George W. Bush once sagely observed, “is that there is no word in the French language for entrepreneur.” He was wrong on two counts: the word comes from a 15th century French term meaning ‘undertake’. And 11 of the 50 largest European companies in the Fortune 500 are French.
Back Market, an online marketplace for refurbished consumer electronics, isn’t at that scale yet, but eight years after its launch it has attracted hundreds of millions of dollars in funding, attracted millions of consumers and is fulfilling the dream of its 34-year-old CEO and co-founder Thibaud Hug de Larauze, to “build a business that makes a difference to society, to people and our daily lives”.
Thibaud was working at online integrator Neteven when he encountered a client that refurbished products and sold them online. When he visited the company’s factory, in a remote part of France, he was struck by the vast disparity between the sophisticated processes on site and the way these refurbished gadgets were presented to consumers in marketplaces such as eBay.
What was needed, Thibaud concluded, was a platform that aggregated these sellers and promoted their wares as an exciting alternative to buying new. He shared that vision with his co-founders, chief creative officer Vanney Vlaute and chief technology officer Quentin Le Brouster.
Back Market opened for trading in the summer of 2014, just over a year before the Paris agreement on climate change, and in a year when the amount of e-waste generated globally topped 50m tonnes for the first time. The science of climate change can get complicated but you don’t have to be Albert Einstein to grasp that a world in which 48 new mobile phones are sold every second is environmentally unsustainable. As Thibaud says: “E-waste is one of the fastest growing streams of waste in the world.”
The media coverage, which portrays climate change as a long-running disaster movie, has alerted us to the crisis but may also implicitly suggest that nothing we do can make any difference. Nothing could be further from the truth. The European Environmental Bureau has estimated that if we just used our mobile phones for one year longer it would save 3m tons of CO2 emissions, equivalent to taking a million cars off the road. Making that a company policy is one easy and cost effective way for businesses to help the environment,
Given that an enormous, global industrial complex is devoted to making us crave the latest laptops, smartphones, tablets, headphones and smartwatches, Thibaud does not underestimate the challenge of giving refurbished consumer electronics mainstream appeal. “We’re not trying to make people feel bad about buying new,” he says. “We just want to make buying refurbished products cool.”
To do that, the company has to confront the prejudices many consumers have about recycled and repaired gadgets. Back Market’s research has shown that quality, security, convenience and price all have a part to play. “We know, for example, that people are much less likely to get the product repaired if the cost is more than 30% of what they paid for it new,” Thibaud says. The challenge for the company is to keep costs under tight control while not compromising on quality. “We know that in the past, one of the restraints was a trust gap,” he says, “which is why we offer a 30-day money back trial period and a year’s warranty.”
The emphasis on quality is embedded in Back Market’s metrics – drawing on user data, the site ranks suppliers with the highest quality scores first, meaning it is in the companies’ own interest to constantly improve performance. By the middle of 2022, this refurbishing marketplace had 2,000 vendors, around 6m clients, 700 employees and was valued, after the latest round of funding at around $5.7bn.
One of Thibaud’s strongest suits is his knack for persuading investors to back his brainchild. Their support has helped make the repair and recycling process more convenient for consumers. In France, the company has launched the Back Care programme, a national network of repair shops that honour the Back Market warranty. The plan is to roll out this scheme to other countries.
Back Market isn’t just challenging the status quo in consumer electronics, it is deliberately taking on the companies that profit from that status quo. On Earth Day this year – the 22nd of April – the company took a risk, using Airdrop to promote itself on model displays and other people’s iPhones within Apple stores.
At the moment, Thibaud estimates, refurbished phones account for 9-10% of purchases. Back Market’s success has avoided 800,000 tons in CO2 emissions. That is progress but he thinks the industry could do much more.
“Some companies are taking the right to recycle and repair more seriously – and regulators are getting to grips with this issue – but companies like Apple and Samsung are also spending millions on advertising to convince us to buy their latest gadgets. One effective way to counter this is to emphasise that refurbished phones are such a bargain,” he says. Depending on the product, a refurbished device may be 20-40% cheaper than a new model.
Next year will be critical for Back Market as it expands beyond its existing 16 countries in a bid to become the world’s go-to refurbishing marketplace. The greatest challenge the business faces, Thibaud says, is not technology or consumer psychology but HR.
“As we scale up in numbers, we have to adapt our culture, the way we work and the processes we use. When you get to 30 staff, the culture cannot be informal anymore. One of the first symptoms that you need to adapt is misaligned communication. There are other critical points - when you get to 100, 250 and 500 employees – where your culture has to evolve and new processes put in place.”
The French government estimates that Back Market is one of the country’s 28 unicorns (start-ups valued at $1bn or more). Thibaud and his co-founders are proving that the slightly condescending Anglo-American attitude to French business, expressed in Bush’s gaffe, has finally passed its sell-by date.