The new normal is changing the dynamics of the Indian smartphone industry. In the last two to three days, there is a sudden spike in demand for refurbished smartphones in the market.
We are going to discuss here on the recent socio-economic factors that gave rise to this rapid demand among the consumers.
Nakul Kumar, Chief Operating Officer at Cashify, states that they are noticing this sudden spike in need of refurbished phones across the market. He also denotes that such a trend may make them run out of supply shortly.
The industry experts suggested that due to the newly enforced custom clearances norms to stop the Chinese cargo has caused a severe shortage of the latest smartphone models, consequently increases the demand for refurbished ones.
Nakul Kumar has also mentioned that the flow of old phones for reselling is also significantly reduced because the users are taking longer than usual time to upgrade their handsets.
Yaantra, a prominent player and an Omnichannel reseller who imports the spare parts from China for refurbishing the old phones has stated that it has sufficient inventory for 45-60 days to fulfil the market requirements.
The popular reselling platforms like Olx, Cashify, Yaantra and Xtracover together facing a sudden spike in demand for refurbished phones since unlock 1.0. This is only because of the scarcity of new models across the nation as companies are facing the shocks of pandemic crisis like reduction in the workforce across the country.
Jayant Jha, CEO of Yaantra, told the reporters that the company had sold out two times more phones in the category of INR 5000 – 15000 when compared to the Pre-COVID days.
Olx platform is a spot for both buyers and sellers across the nation. It has quoted that, the portal had witnessed a higher demand since the beginning of this month that has corresponded with Pre-COVID situation. It is reported that there has been a 40% increase in buyers, searching for refurbished phones on the portal. Whereas it’s 71% growth on the supply side as stated by Olx India head horizontal business unit, Tarun Sinha.
The re-commerce smartphone marketplace, dominated by Xtracover.com, has also witnessed the sudden growth in the demand that is higher than the Pre COVID times. Soumitro Gupta, CEO, Xtracover.com, mentioned that there are 3.5 times increase in the market demand and if this continues they will reach the 2.5 times business growth by the end of the year. Gupta also denotes the challenges they are facing on the logistics and distribution channels are a way higher than the supply of the old phones.
Due to recent India- China faceoffs, the customs department has initiated various stringent measures like 100% physical verification for every shipment coming from China all across ports and airports from last Monday have greatly influenced the delay in the release of Chinese cargo.
Even the major smartphone makers like Xiaomi, Vivo, Oppo, Realme and Oneplus are facing the socio-economic shocks and are running at 40% capacity. The Chinese smartphone manufacturers account for 80% of the quarterly smartphone shipments in India. These companies, sourcing most of their component inventories and premium smartphones from China, are now facing a severe crunch in their warehouses and assembly units.
The refurbished smartphone market in India was already clocking an impressive growth rate for the last few years. In 2019, the industry recorded 9% YoY growth despite a 1% global decline.
The recent anti-China sentiments and the prevailing pandemic crisis has further surged the demand all across the reselling platforms. As a number of smartphone makers are finding it tough dealing with the aftermath of the recent conflict, these reselling or re-commerce platforms are witnessing substantial growth in business when compared to the earlier Pre-COVID market scenario. The hard socio-economic situation is paving the way to reselling platforms as people are choosing to buy refurbished smartphones amidst the shortages in new models.