Authored by Harsh Talwar, Founder & CEO, CASH FOR PHONE
Have you ever sold or exchanged an old phone? Or bought a refurbished one? If yes, then you are a part of the $67 billion global industry by the end of 2023, according to CashForPhone. However, as you’d expect, buying a refurbished phone or second hand phone isn’t as simple as walking into a store and asking for one — it takes a bit more research and understanding.
What does ‘refurbished’ mean?
Even though the usage of the term “refurbished” is quite commonplace, it doesn’t inevitably make it a standardized term. It can often be found used interchangeably with words like “recertified,” “reconditioned,” or just “open box,” or “pre-owned.” Keeping aside the precise word, “refurbished” is a blanket term that covers a lot of potential scenarios. It could refer to a product that was manufactured to be sold as new, but for some probable reason was returned to the manufacturer, either by a store, reseller or customer, and can now be sold again as brand new. People often go for such products because they are then available at discounted prices.
The terminology changes, but the idea is the same. Refurbished phones could have easily been opened and returned to a store, but could have also been returned to the manufacturer for a fault or a breakdown that was then resolved before selling again. Most of the time, depending on the country where you’re shopping, a product that was purchased and opened — and possibly not even removed from the packaging or powered on — can no longer be sold as “new” and must be sold as refurbished instead. Stores, resellers, or companies themselves then have to discount the device because it technically isn’t new-in-box and therefore can’t command the same price as a new phone.
Unfortunately, it’s difficult to know when buying a refurbished phone why exactly the phone has made its way to refurbished status or what was done to the device to certify then that it was refurbished.
Let’s have a look at some stats
The market of used phones is actually growing 4-5x faster than the overall comprehensive smartphone market. In India, there is a massive demand for pre-owned smartphones, making it one of the fastest-growing market hub for refurbished handsets around the globe. Also, the tech enabled user penetration is 15.0% in 2020 and is expected to hit 20.3% by 2023.
However, the refurbished smartphone market in India, grew a healthy 9 per cent last year. The second-hand market is being mostly captured by refurbished phones, which have been growing at more than 200% year-on-year and are the largest product classification in the refurbished arena.
According to research most of the sales of second hand phones booms in the festive season. Every time, around 22%-25% of smartphone trade on e-commerce platform used to take place through exchange offers on festivals, and this festive season this ratio is definitely much higher due to the upgraded mindset of costumers. Also, the demographics second hand smartphone sales by users indicates the highest sale in New Delhi to be 18% followed by Bengaluru-13%, Mumbai-12%, Hydrebad-7% and others to be 25%.
India is going to be a frontier in the market of second hand phones. According to experts continuous upgradation in mobile phones varieties and subsequent supply of the newer versions have also given uprise to the demand for second-hand or refurbished category smartphones. Another prime reason is the money savings factor and affordable vertical. Many people, who are first-time smartphone buyers, are choosing second hand phones due to easy affordability. The surge in refurbished and second hand mobile phone industry can also be a boon for India if the government encourages global organizations to set up operations under the Make in India initiative.