Refurbished Devices In Demand As Prices Rise
NEW DELHI :
Indian buyers are increasingly turning to refurbished electronic devices as global supply chain disruptions take up the prices of new products. While smartphones are primary growth drivers, other electronic products, too, have seen rising demand amid the growth of organized sellers of refurbished goods.
According to a report by research firm RedSeer on 5 May, IT services major Tata Consultancy Services Ltd sources 100,000 refurbished laptops every year from organized reverse commerce (or recommerce) companies.
Redseer said the refurbished electronics goods market in India could grow to $11 billion in gross value by March 2026, up from approximately $5 billion in March 2021.
Siddharth Surana, engagement manager, Redseer, said laptops, televisions, headphones, wearables, washing machines, and gaming consoles will constitute about $1 billion of the market. “In India, wearables that could contribute to the sector would be the aspirational ones, such as the flagship Fitbits or the Apple Watch,” he added.
The growth has also led businesses to become more organized. Organized sellers accounted for only 1% of the market and about $20 million sales in FY16, which grew to 8% and $400 million in FY21. By FY26, organized sellers are expected to outpace the rest of the industry and account for 20% of the market and post $2.2 billion in sales.
The growth in the sale of refurbished products has also attracted large e-commerce players. While Amazon has been selling refurbished products since 2017, Flipkart acquired refurbished electronics marketplace Yaantra in January.
Nakul Kumar, co-founder and chief marketing officer, Cashify, said a majority of the sale of refurbished devices is driven by smartphones. “Around 5-6% of Cashify’s business comes from refurbished laptops, which grew due to the pandemic-driven demand for devices last year. Another 2% of Cashify’s market comes from accessories, while smartphones account for 92%.”
The Redseer report, too, said smartphones account for 90% of the sector. Fuelling this growth are two factors—rising prices of new smartphone and higher profit margins for retailers.
“Factors such as remote work and education, pent-up demand due to markets being closed in the wake of the pandemic, tighter finances, and constricted supplies were major reasons why the refurbished market for smartphones saw sharp growth in 2021 over 2020,” said Glen Cardoza, senior research analyst, Counterpoint Research. “2021 saw a rise of nearly 25% year-on-year in India’s refurbished smartphone sales.”
Redseer said while a basic smartphone starts at $90 ( ₹6,800) in India today, a similar used smartphone costs $30 ( ₹2,300). For retailers, while new phones have a margin of about 5%, used phones could fetch them up to 8-10%.