India’s second-hand smartphone market is primed for growth
- A number of homegrown e-commerce firms like Cashify, Togofogo and InstaCash deal exclusively in the buying and selling of
- The sales of
refurbishedsmartphones in India are expected to grow at a compound rate of 27% over the next two years.
- According to Counterpoint Research, worldwide sales of refurbished smartphones increased by 13% to 140 million units in 2017.
A smartphone is still an aspirational product for many in India. It is connotative of a specific lifestyle, one that is in tune with the digital, information age.
India is a country of 1.35 billion people of varying means. Moderately expensive products end up trickling down and being used by different owners. And homegrown companies like Cashify, Togofogo and InstaCash are looking to cash in on this process by taking advantage of the reusability of smartphones.
Unlike Amazon India and Quikr, which sell a variety of used products, Cashify, Togofogo and InstaCash offer online marketplaces that are exclusively for the buying and selling of used and refurbished smartphones. Prior to the launch of these companies, the most popular place to buy a used smartphone was through your local bazaar - the unorganised physical retail market.
As more Indians in tier-2 and tier-3 cities get access to the internet and more companies enter the market, sales of of refurbished smartphones in India are expected to grow at a compound rate of 27% over the next two years.
In fact, a spokesperson for Amazon told the Economic Times, that the platform’s sales of used smartphones in India was growing at a whopping 400% year-on-year. Meanwhile, Togofogo has facilitated the sale of 350,000 phones since its inception in 2015.
The global market is also growing. According to Counterpoint Research, worldwide sales of refurbished smartphones increased by 13% to 140 million units in 2017 - making it the world’s fastest-growing smartphone segment. In contrast, the overall market for smartphones only grew by 3%. Even more significantly, refurbished smartphones now comprise nearly 10% of the global market.
Adequate demand, adequate supply
India’s second-hand smartphone market has a lot going for it. Smartphone penetration is increasing and product life cycles and refurbishment times are decreasing.
For cost conscious Indians, a second-hand phone with a lot more features might be worth buying over a brand new phone with less specifications. As a result, more expensive smartphones like Apple’s iPhones and Samsung’s Galaxy series, which would normally be out of a mid-market customer’s reach, can find a second or third life after being refurbished and sold at a significant discount to their MRP.
From a supply perspective, people are always looking to trade up their smartphones. In light of the rapid pace of development and the consistent churning out of new smartphone models, people are comfortable selling their old phones at a low price before upgrading.