The Indian used smartphone market has been seeing a major boost in the past few years, with experts predicting a substantial increase in numbers in the future as well. In an analysis by Redseer Consulting, the used smartphone market’s total addressable market size increased from $2 billion to 5 billion between FY16 and FY21. They also predict that the market is poised to reach a staggering market size of 10 billion by FY26. To put these in context, the Dublin-based market research agency estimates India’s smartphone market size overall to be at $139 billion in 2021.
There is a general consensus in the industry that the used phone market is seeing an uptick in growth in recent years. According to a report commissioned by the Indian Cellular and Electronics Association, an industry association that represents brands such as Dell, HP and Foxconn (manufacturer for Apple), the market size for used smartphones in 2020 was around 20 million units (market value of $1.7 billion). IDC estimates this number to rise to nearly 90 million new smartphone units, that entered the market in 2021.
Navekendar Singh, Technology and Industry Analyst, IDC, suggested that the major reason behind the significant uptick in the used smartphones during the pandemic is that “people upgraded their smartphones more during the pandemic as the device was needed for almost everything. Getting a better device meant selling the old one in the 2nd hand market”.
According to the Redseer report, “the growing popularity of e-commerce platforms for used and refurbished smartphones is driving the demand. Refurbished products are a growing source for users to try out new products of their refurbished brands”.
According to the ICEA report, as the second-hand smartphone market has evolved over the past few years, multiple large and small players have made their way into the market. Larger players such as Cashify and Yaantra have a presence across different stages in the second-hand market. The smaller players have their niche in specific areas of the value chain.
Secondhand smartphone market players in India include Flipkart, Amazon Reviewed, OLX, Quickr, and hyper-local entities such as HyperxChange.
Although there is clear private interest in this space, most of the secondhand smartphone market continues to remain disorganised.
Quoting ICEA, entry of private players has increased the market presence of organised players from 10 per cent earlier to 15 per cent at present. “In the tier 3/4 cities in India such as Mathura, Howrah, Thrissur, Kannur, the easiest option for the customers has been to go to their neighborhood stores and give their old handsets, in exchange for cash or to offset the purchase of a new phone,” said ICEA.
However, the growing TAM for the used smartphone space could pose a great opportunity for companies, according to Redseer. Tech enabled startup, companies that might resign supply chains making them more transparent are already here according to Redseer. “These new age tech players are solving C2C AND C2B2C models that not only address…pain points, but also offer better experience to consumers,” the report said.
As consumers continue to upgrade their devices, and purchase of smartphones increases and at shorter intervals, this could also pose a great export opportunity for used smartphones according to exports. Especially since, only a fraction of used smartphones come back to the second hand phones market.
Published on
May 02, 2022
