The Covid-led disruption in the smartphone industry is opening up avenues for the refurbished and pre-owned devices category which is seeing a demand shift from new devices due to dip in consumers’ disposable incomes.
Omni-channel goods’ resellers such as OLX, Quikr, Cashify and Yaantra are witnessing a flow in demand towards the organised refurbished and pre-owned smartphone market in just over a week of easing of lockdown restrictions.
The major challenge for the industry as of now though is the continuous supply of smartphone parts from China which is expected to normalise in 5-6 weeks, experts said.
Cashify said that despite fewer people outside, it has seen a surge in demand in both online and offline channels for the week gone by. Yaantra said there has been a 30% rise in orders placed by offline retailers especially in tier-2 and tier-3 cities.
Pre-owned goods reseller Quikr estimates a double-digit growth in the segment in the next two quarters, factoring in immediate the need for smartphones.
Market intelligence firm Counterpoint Research predicts that and while the new handset market will decline 10%, the refurbished category will decline by 4% and growth is expected in latter part of second half of the year.
Yaantra said that besides premium brands which sell faster is the re-commerce market, mid-range brands such as Oppo, Vivo and Realme are also seeing traction with Rs 5000-Rs 8000 being the most popular price band.
“Pre-owned smartphones owing to affordability continue to be of higher interest for consumers as rural internet users have surpassed urban internet users recently as per a report from IAMAI & Nielsen,” Tarun Sinha, Head, Horizontal Business Unit, OLX India told ET.
Increasing adoption of e-learning and work from home solutions has made smartphones an essential commodity, especially when the market for laptops has been shrinking in the past 5-6 years, said Jayant Jha, Co-Founder & CEO, Yaantra. The average time spent on smartphones has gone up from 3-4 hours to 7-8 hours per day amid lockdown.
“This category over the next three to four quarters should do amazingly well as it drives affordability across the pyramid when people do not have much disposable incomes,” he added.
Nakul Kumar, co-founder & COO, Cashify which runs 42 offline stores and deals in smartphones, laptops, tablets, desktops and gaming consoles, added that the need to stay connected in these times and the need for digital inclusion will fuel the migration of featurephone users to second-hand smartphones.
The company has launched the Yaantra Protect program to ensure zero contact delivery and is building new upgrade and exchange strategies to offer a seamless customer experience.
Quikr said recognition of a brand for used devices among users is crucial to drive growth in the segment.
“We are offering one year replacement warranty even for used devices and we have recently introduced buybacks and no-cost EMI option which are the major trust drivers for users in building a refurbished brand,” Sarath Chandra Gudlavalleti, VP, QuikrBazaar which owns 50+ outlets for variety of goods.