Why used phones are flying off the shelves | Mumbai news - Hindustan Times

Why used phones are flying off the shelves

ByShuchi Bansal
Oct 27, 2023 06:54 AM IST

Reasons for this spike stem from demand in both metros and smaller cities and also from new smartphone buyers in mature markets and feature phone users transitioning in emerging markets within the country

When Saket Saurav and Avneet Singh launched their start up ReFit Global in 2017 to refurbish and sell used mobile phones, they did not anticipate the big push to their business would come from the Covid 19 pandemic and the ensuing lockdown. “In that period of work-from-home and online classes, household demand for mobile phones and laptops doubled. People sought value-for-money devices and we focused on the smaller towns (tier 2,3 and 4 markets). The demand for second-hand phones that rose in 2020-2021 has not dipped ever since,” said Saket Saurav, co-founder and chief executive officer, ReFit Global.

Why used phones are flying off the shelves
Why used phones are flying off the shelves

Latest Counterpoint Research data backs his claim. It says 35 to 45 million used smartphones will be sold in India this year, a 15% jump over last year. Sale of new smartphones on the other hand is expected to drop by 5% from the 151 million sold last year. Glen Cardoza, senior analyst, Counterpoint Research said India saw significant surge in used smartphones sales in 2021, a trend that gained momentum post Covid. The growth amplified in 2022 making India the fastest-growing secondary smartphone market globally.

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Reasons for this spike “stem from demand in both metros and smaller cities and also from new smartphone buyers in mature markets and feature phone users transitioning in emerging markets within the country,” Cardoza said.

Meanwhile, the ecosystem around used phones has also improved. With e-commerce marketplaces like Flipkart and Amazon as well as offline retailers offering lucrative exchange deals for old phones, the second-hand phone supply has increased. ReFit, for instance, buys its inventory from Flipkart and Amazon, runs the old handsets on its diagnostic app for checks, rectifies the problems and sells the phones with warranty through its own website and thousands of retail points in the country.

Firms in the segment have also tried to change the consumer in seeing used phones as fully functional “refurbished” devices and not as “second-hand” phones. “There are trusted players such as Cashify and Mobex selling used phones and laptops, providing almost all the services that a consumer is used to when buying a new product, be it doorstep delivery, exchange offer, warranty or after sales support,” said Rinku Patnaik, managing director, (Research) at Ipsos India. “We are likely to see the large unorganized market of used gadgets slowly becoming more organized,” she added.

Consumer awareness has resulted in higher adoption of exchange offers on online platforms from 8-9% four years ago to 30% now, said Saurav. Traction for used phones has also increased as most popular smartphone brands like Xiaomi, Oppo, Samsung, are now launching most new phones at 15,000 and above. “Their focus has shifted from the sweet price point of 8,000 to 15,000 for the Indian consumer. Refurbished phones have taken that spot,” he said.

Used mobiles are also trending because Indians like to flaunt their smartphones and brands like iPhone, OnePlus and the high-end Samsung devices are aspirational. People can now afford these brands in the refurbished segment at a price that is cheaper by 25%-30% or more, depending on the phone.

“The need to flaunt a high-end phone has always been there. With the cost of ownership going down, the Indian consumers (specially going down the social strata and town classes) are also able to afford an aspirational brand at a much lower price and show it off in their social circle,” said Patnaik.

Though attractive EMI options for new phones are available, “the allure of used phones persists, driven in part by the higher margins they provide to businesses and the immense price value consumers get compared to new smartphones,” said Cardoza. The trend reflects the evolving desires of Indian consumers, where smartphones are increasingly viewed as affordable luxury items, even for those in lower-income strata, he said. “The most notable trend right now is the increasing ASPs (average selling prices) of secondary smartphones in India,” he added.

Personal computer maker HP has also said it will sell refurbished laptops to retail customers and small businesses in India. “Soon you will see many more smartphone brands and laptop makers themselves getting into the refurbished devices business in India. The concept is popular in the US and the UK. Companies are interested in selling new devices and getting consumers to upgrade. To get them to upgrade they need to pick up the old devices,” Saurav said.

Counterpoint Research said the smartphone replacement cycle for Indian consumers is about 3 years 4 months at present.

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