Refurbished Smartphone Shipments: India Shows Growth While Global Market Is On Decline

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The year 2019, while showing a 2.9% decline in the worldwide smartphone shipments, also witnessed 1% YoY decline in the worldwide refurbished smartphone shipments. But, in India, the trends are different.

The findings are derived from the latest report that has been released by Counterpoint’s Refurbished Smartphone Tracker. In 2019, the global market for refurbished smartphones reached just over 137 million units. 

Refurbished smartphones are not like typical second-hand or pre-owned phones. In most cases, these are devices which may have been put out for demos, returned by a customer for having a fault after which the manufacturer repairs it and puts it up for reselling.

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According to Counterpoint, the fourth quarter the market happened to show some minuscule growth as Apple upgrades happened to remain strong. However, it was not enough to offset the major decline in the first half. In the last four years, this is the first time when the refurbished market has been on a decline for an entire year.

The reason?

It is linked with the decline of new smartphone sales in key regions such as the US, China, and Europe. During 2019, the sell-through in these regions combined declined 6% YoY.

Along with this, another major reason was the fact that the upgrades in the premium segment of smartphones was slow as users continued to hold on to their devices for longer and replacement cycles became lengthy. In developed economies, the key to refurbished device volumes is largely premium smartphones.

The largest market for refurbished devices, China showed a whopping 4% decline YoY during 2019. This was due to a combination of many factors, the biggest contributing ones being the sluggish economy and the fact that it is very hard for players within the refurbished market space in China to make a profit. Also, one shouldn’t forget the China-US trade tensions which also affected this market as consumers have now become more cautious with their purchases. That being said, the situation in 2019 wasn’t all bad.

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Source: Counterpoint Global Refurbished Smartphone Market Growth – 2019

There were several growth markets in developing economies such as India, Latin America, and Africa despite the decline in the overall market. This is mainly because the refurbished smartphone ecosystem in these economies is still at a nascent stage. Most of these countries still remain highly under-penetrated. 

Many consumers in these emerging regions are actively looking for affordable smartphone devices to come online. Some of the factors which are at present aggressively fuelling the growth in these regions are – the transition from feature phones to smartphones and the aspiration of premium devices at an affordable price point.

Currently, in India, the entire refurb segment is going through a transition from the unorganized sector to organized. This, in turn, is now being expected to open up more opportunities for the country. Nonetheless, consumer awareness about refurbished devices is something that still needs to be dialled up several notches in these emerging markets. Also, standardization in processes and quality assurance to build consumer trust are something that needs attention as well. 

Way Forward For Refurbished Smartphones

Going forward in 2020, because of the sudden and unexpected spread of the COVID-19, the growth in this segment will definitely be severely impacted along with that of the worldwide shipment of smartphones.

The latest report on the smartphone shipment projection between 2020 – 204 indicates that this will be the first year in the history of smartphones wherein the market will record a decline in double-digits. Now, if it comes true then the ripple effects of this condition will definitely be felt by the refurbished smartphones’ global market as well. Now it remains to be seen if and how fast can the conditions can improve for both the global smartphone shipments and refurbished devices market. We will keep you posted on all future developments. Until then, stay tuned.

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