The used electronic market in India is rapidly growing at 16% CAGR and is expected to be worth USD 11Bn by FY26. With an increased demand for affordable yet branded smartphones, a new subsegment of refurbished electronics has emerged: used smartphones. This used smartphone market is also expected to grow and reach USD 10Bn by FY26, says a report by Redseer. A new breed of tech-enabled startups and players are fueling the growth of the used smartphone market in India.
The used smartphone market is seeing better margins for retailers compared to the sale of new smartphones. In 2021 alone, India witnessed the purchase of over USD15 Bn worth of new smartphones online. With the number of smartphone users reaching the 550 million mark, it is estimated that on average, a recommerce app user sells more than two smartphones from each household when the need to upgrade to new devices rises.
Recommerce, or reverse commerce players are addressing pain points that the traditional used phone market used to face. Some of the challenges faced by the traditional sector include lack of transparency in pricing, tedious time-consuming buying process, poor quality of used products which do not have any warranty and a lack of digital presence for purchasing. On the other hand, new-age tech players are solving using C2C, C2B, and C2B2C models that not only address the above pain points, but also offer better experiences to consumers. Strong network effects, supply-chain efficiencies, and omni-channel presence are a few offerings of these players, which consumers seem to love.
“The refurbished market today is providing a rich opportunity to both users and companies. The growing popularity of e-commerce platforms for used and refurbished smartphones is driving the market demand. Because of the rapid technological innovation in consumer electronics along with increasing tech savviness, Indian users are frequently changing to newer devices. Also, due to the pandemic, large numbers of unorganized channels got disrupted by organized digital recommerce players which led to the requirement of used electronics. Used devices prove to be a more cost-effective alternative to consumer’s growing needs. Refurbished products are a growing resource for consumers to try out new products from their favorite brands and to be more sustainable and price-conscious in their buying behavior” said Siddharth Surana, Engagement Manager, Redseer Strategy Consultants.
