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Refurbished mobile phones are seeing a surge in demand. Refurbished smartphone sellers like Flipkart, Cashify, and Grest are witnessing strong growth, particularly for high-end devices such as iPhones.
With the festival season around the corner, companies operating in this space are expecting a significant uptick in sales of such devices.
Growth in the refurbished market is being driven by the rising demand for premium smartphones. High-end devices, such as Apple’s iPhone series and Samsung’s Galaxy S series, make up a large chunk of the refurbished smartphone market, as the affordable price tags allow consumers to purchase these phones at significantly lower prices.
While total shipments in the Indian smartphone market grew just 3.2 per cent year-on-year (Y-o-Y) to 35 million smartphones in Q2 CY2024, the super-premium segment (over $800) grew 22 per cent Y-o-Y, according to data from the International Data Corporation (IDC).
“Volumes (of refurbished smartphones) are likely to keep increasing as demand continues to grow. A growing share of consumers want better devices, and they are ready to pay for them,” said Glen Cardoza, senior research analyst, Counterpoint.
According to a report by consulting firm Redseer, the refurbished electronics goods market in India could grow to $11 billion in gross value by March 2026.
With the festival season around the corner, companies operating in this space are expecting a significant surge in sales of these devices.
Strong growth
For instance, Cashify – one of India’s largest re-commerce players – reported a massive 444 per cent increase in revenue from refurbished smartphone sales in the calendar year 2023. The company also witnessed 25 per cent growth in its buyback business.
The surge was attributed to aggressive promotions, warranty offers, financing schemes, and increased awareness of the advantages of refurbished devices, the company said.
“We are witnessing a transformative moment in the new launches, characterised by the advent of artificial intelligence, 5G, the emergence of foldable phones, and a growing focus on sustainability,” said Mandeep Manocha, co-founder and chief executive officer, Cashify.
Manocha added that new tech advancements are also making the refurbishment segment grow. This market is being driven by advancements in refurbishment processes, which ensure high standards of quality, data privacy, and reliability.
Meanwhile, larger players are also anticipating growth in this market. E-commerce major Flipkart, for instance, recently launched its own business-to-business (B2B) app for refurbished devices called ‘Flipkart Reset for Business.’
The app aims to help sellers of refurbished products connect with customers across India.
“The recommerce industry is growing rapidly, fulfilling the aspirations of millions of customers to own devices at affordable prices… With the B2B app from Flipkart Reset, Flipkart aims to level the playing field for sellers by offering a platform to tap into this demand,” said Ashutosh Singh Chandel, senior director and business head, recommerce at Flipkart.
Currently, Flipkart Reset sells smartphones and accessories, and services over 800 cities across 29 states.
Apple in the lead
The demand for iPhones, in particular, is driving growth in the refurbished market. For Cashify, Apple was the most sold smartphone brand with more than a 50 per cent share by volume. Other brands like Xiaomi, OnePlus, Samsung, and Oppo significantly trailed behind.
Grest, another refurbished smartphone seller, has similarly sold twice as many Apple devices this year as last year. With the imminent festival season, the company is expecting a three-fold increase in sales of mobile phones.
“Grest grew five-fold from FY22–23 in terms of revenue. There was a huge demand for Apple devices this year too, and 67 per cent of our revenue came from Apple sales. As our main focus has been on aspirational devices, we have sold approximately 15,000 refurbished phones (mostly Apple) in the current financial year since April 1, 2024,” said Shrey Sardana, co-founder, Grest.
Tapering volumes
While large re-commerce players are witnessing impressive growth, analysts believe that while volumes will grow, the average selling prices (ASPs) in this segment will also go up.
According to data from market research firm Counterpoint, refurbished smartphone volumes grew 19 per cent Y-o-Y in 2022. COVID and macroeconomic factors played a big role here. It grew just 10 per cent Y-o-Y in 2023, down from 19 per cent Y-o-Y in 2022. The market is expected to grow by about 7–8 per cent in 2024.
Analysts say that Apple’s market share is expected to continue to rise in 2024, while Xiaomi and other Chinese brand volumes are likely to decline.
However, while volume growth has slowed down, average prices of refurbished smartphones have increased.
“The Indian refurbished smartphone market growth has slowed down, but volumes are likely to keep increasing as demand continues to grow. A growing share of consumers want better devices, and they are ready to pay for them,” said Cardoza of Counterpoint.
Re-commerce companies operating in the segment are also bullish on market growth and do not expect any hurdles.
“We are not anticipating any slowdown in the coming years. We anticipate overall multi-fold revenue growth in the coming five years,” said Grest’s Sardana.
First Published: Sep 26 2024 | 6:30 PM IST
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