Across India, millions of users still buy refurbished phones believing that they would rather use an old phone with the features they need than settle for a new phone with lower specs. Along with affordability, the shorter upgrade cycles of smartphones these days are also fuelling a demand for used phones.
As per news reports, India has an unorganized market of 70 million refurbished smartphones with 35% year-on-year growth rate. It is also believed that refurbished handsets will trigger internet penetration in rural India in times to come. Throwing more light on this and explaining the opportunity that Quikr sees in this space, Sarath Chandra Gudlavalleti, VP – Quikr Bazaar speaks to VARINDIA to share more aspects about this market –
Kindly define the refurbished smartphone market?
In this era of digitalization, the refurbished smartphone market in India has largely been offline and unstructured. That said, this space is still witnessing over 100mn new smartphone shipments p.a. Given that we have over 100mn active mobile subscribers; most of these smartphones are potentially replacement handsets. Looking at the trends on our platform, we believe that the consumer does not need to compromise on the choice of a smartphone anymore and hence the acceptance of refurbished phones is here to stay.
What is the scope in this market? How big is the market? At what percentage this market is growing?
The scope for refurbished market is huge with technology changing rapidly and gadgets becoming outdated sooner than usual, giving an opportunity for refurbished phone market to flourish. The main target audience for this are consumers that have the mindset to use the best that the market has to offer while not wanting to compromise due to cost constraints. Consumers usually get a discount of 30-40% on these products. Not just that, every product available on our platform goes through rigorous quality checks. Quikr is seeing 42% QoQ growth in sale of refurbished phones and Apple, Samsung, One plus, Xiaomi and Motorola seem to be the most popular brands.
Who are the major buyers of this market? From which states you are witnessing the maximum pull?
While huge demand for refurbished phones is seen in the metros, cities like Jaipur, Ahmedabad, Vishakhapatnam, Patna, Raipur, Surat, Madurai, Ludhiana, Guwahati and Indore are the top cities in terms of demand.
Indian customers are generally skeptical while buying any second hand electronic device. What kind of behaviour do you observe among the customers in this case?
Refurbished phone market has made the access to high end smartphones within consumers reach. Refurbished smartphones doesn’t pinch your pocket as they are 30 to 60% lower than the new smartphone allowing millennials to afford a higher spec’ed device at lower price. There are a few barriers in buying a used Smartphone: Quality, Trust and Pricing being the key ones. Quikr certified phones come with Rigorous Quality checks. They are refurbished to ensure that they work as good to address the Quality related barriers. Smartphone is both a Personal & Productivity device and one doesn’t want to compromise any more.
What are the challenges of this market? Does unorganized grey market acts as a threat?
Indian refurbished smartphone market is largely unorganized and predominantly offline. The grey markets are restricted to big cities hence nationwide accessibility is a challenge. Another barrier is in buying a used smartphone based on Quality, Trust and Pricing parameters. Digitally trusted platforms like Quikr are solving problems of accessibility, discoverability and transactions. Also Quikr certified phones come with Rigorous Quality checks and 6 month warranty. They are refurbished to ensure that they work as good to address the Quality related barriers plus warranty working as an additional layer to address trust related issues.
What are the facilities you provide before selling refurbished products? What are the parameters before buying a handset?
Quikr Certified smartphones go through rigorous quality checks covering functional, physical and IMEI checks. These phones come with a 6 month 3rd party warranty and a 7-Day replacement guarantee. The parameters considered before buying a handset are price, brand, functions and specifications.
What is your take on refurbished smartphones helping in penetration of internet in rural India?
Looking at the trends on our platform, we believe that the consumer openness & acceptance to refurbished smartphones is here to grow. We have been witnessing 42% q-o-q growth for the certified phones on our platform. We are already present in more than 1200+ cities and Tier-2/3 and below cities contribute about 70% to the demand for refurbished smartphones on our platform.