Do you remember the time when purchasing a smartphone was a ‘day out’ activity planned with a friend or family member? You needed to have the number of your local mobile phone store’s owner saved for updates on what was in stock and in your budget. Not just that, you also needed to be on friendly terms with them so that you could get a sweet deal.
The mobile store owner was a friend, guide, mentor, and the ultimate authority on smartphones. From purchasing the phone to adding accessories, doing frequent talk-time recharges to maintenance and repairs, it was a one-stop-shop. Even for those looking for pre-owned phones and smartphones, what passed off as a refurbished phone was a dusty outdated piece with a basic factory reset.
In the last five years or so, things have turned around and how. Since the launch of the ‘Digital India’ initiative by the Government of India in 2015, accessibility to the internet technology and digital tools have improved by leaps and bounds. The knowledge and power have shifted into the consumer’s hands. Right from smartphone trends, accessibility to global brands, detailed handset specifications, price comparison across sales channels, and peer reviews to after-sales service network and loyalty or card-based discounts, the Indian consumer has all the required information and choices at their fingertips. India is one of the fastest-growing smartphone markets in the world. An estimated 90% of the population today has access to digital technology that is an integral part of people’s lives, starting from communication support, managing work, engaging in e-commerce, to fuelling economic growth. The average Indian today is a lot more tech-savvy, heavily dependent on their smartphone, and constantly looking to upgrade to advanced handsets. The resultant shorter upgrade cycle has given a major fillip to the affordable refurbished and used mobile phones market.
As per a Counterpoint Research report, the average refurbishment cycle of smartphones has shortened to a year or two, from three to four years. As more and more customers are upgrading their mobile phones within a shorter span, it has created a supply of sparingly-used options that can be refurbished to a ‘like-new’ condition. In 2019 alone, a staggering 14 lakh pre-owned smartphones were sold in India. That is a growth of 14% from the previous year.
The Indian refurbished device ecosystem is valued between US$6 to US$7 billion and consistently growing at a CAGR of about 10%. A large chunk of the refurbished market continues to be dominated by the unorganized sector. Yet, there is tremendous potential for growth as handset penetration in India is just around 45%.
The organized sector has witnessed phenomenal growth in the last two to three years at about 25% to 30% and while other than the credibility that they bring in through their digital platforms, organized players can give you a multitude of options to choose from across price points and enable an informed decision-making process. Further, they ensure that a complete diagnostic check is conducted on every handset. They can ensure a 100% data wipe with a firmware upgrade and flashing, so that the seller’s personal security is not compromised. As a buyer, you can be assured that any physical damage or software bugs have been dealt with and there are no nasty surprises waiting for you. More often than not, you will also be able to receive all handset-related accessories, as well as a warranty with the purchase for absolute peace of mind.
As per McKinsey’s Digital India report, digitization is set to create opportunities worth US$435 billion till 2025. The refurbished market will not only benefit from the rapid digitization but will also fuel it in return. It will boost consumerism, while making technology accessible to a lot more people, especially in semi-urban and rural areas, within an affordable price point. With these tools, they can further explore the vastness of the internet to learn, engage, and contribute to the expected 65 million jobs, thereby complimenting the chain of economic and digital potential.
About The Author
Mandeep Manocha is the Co- Founder and CEO of Cashify. Mandeep, bitten by entrepreneurial bug early in life, took the plunge right after B-school in 2009 by starting ReGlobe, one of India’s first recycling facility to convert scrap tyres and rubber into fuel oil. There, he worked with various leading electronics brands and helped them with the end of life product strategies, reverse logistics, consumer connect and marketing green initiatives. In 2013, ReGlobe (now renamed Cashify) forayed into online re-eCommerce, building an online platform that makes selling old electronic devices a simple affair by helping customers with price discovery and cash in hand with the least amount of effort.
Editors' Note: This article is part of the 25 Years of Internet In India series, where we try to capture how the state of mobile services, home broadband, services and content have evolved, particularly in the past few years. We try to understand what the internet means for us, be it for the new reality of work from home, for entertainment and the Netflix binge watching, music streaming, online gaming and more. With the Industry Dialogue being a multi-part series by News18.com, the industry talks about the impact of digitisation, the adoption of technology by the masses, the proliferation of smartphones and the wider demographic going online, and what that means for India going forward.