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No Let-up in India Refurbished Smartphone Market Boom

India is a booming market for pre-owned smartphones. The market showed its potential in 2019 when it grew the most globally. Even in 2020, the second half of the year more than made up for the volumes lost in the first half, according to Counterpoint’s Global Refurb Smartphone Tracker. This year too, the market is expected to report stellar numbers.

Source: Global Refurbished Smartphone Tracker

Important factors shaping the Indian market

Importing pre-owned smartphones into India for usage is curtailed by the government. But that does not slow down the players dealing with volumes in the refurb market. Although India is relatively self-sufficient with supply compared to other countries, one of the main challenges is a complex and unstructured chain in the value system.

The brands and models which sold 2-3 years ago are the ones that make up the bulk of the supply in the secondary markets. Therefore, the players do not have control over what brands or models come their way. Similarly, the level of repair or refurbishment differs across volumes. Refurb players then have to take a call on which ones can be taken in and which need to be disposed of to others in the chain.

While brands like Apple have the most demand, they also command a premium price in the Indian secondary market. Unlike others, Indian consumers have also shown an affinity towards Chinese brands like OnePlus, Xiaomi, OPPO and vivo.

The online channel for buybacks and resale activities has been present in the refurbished smartphone market for a while now. Most large players already have online platforms which are promoted well to ensure convenience. This holds true for metro and Tier I cities. However, the strategy to tap rural areas needs to be different. These areas hold a high potential and that is why players are keen to gain volumes at the earliest.

2021 Outlook

As online sales of new smartphones increase, more consumers choose to trade in their devices, which provides an added supply to the secondary markets.
Increasing volumes are flowing in from Tier II, III and IV towns. These geographies also represent the highest potential for refurbished smartphone demand.
Consumers who previously chose to sell to friends/acquaintances or small neighborhood stores are looking at selling to structured businesses with an online presence and doorstep options. This spells value for the consumer in the form of money and convenience.

There is a need to structure the vast unorganized secondary smartphone market in India but currently, players are looking at gaining volumes in a market where the potential is very high.

Global Refurbished Smartphone Market Volumes Grew 4% in 2020; Higher Growth Expected in 2021

Boston, Toronto, London, New Delhi, Beijing, Taipei, Seoul – July 13, 2020

The global refurbished smartphone market saw healthy growth across most regions in H2 2020. The market more than made up for the slump in H1 2020 with a modest 4% increase in 2020 compared to 2019 volumes. Counterpoint expects a higher increase in 2021.

The Surge in H2 2020

Due to the sharp deceleration in H1 2020, mainly due to COVID-19, the refurbished smartphone market saw a rise in demand and supply in H2 2020. Commenting on the dynamics of the market, Senior Research Analyst Glen Cardoza said, “While there was limited supply of smartphones in the secondary market in the first half of 2020, there was a sharp increase in both demand and supply during the second half of 2020. When the markets opened, most refurb players saw a surge in resell volumes and trade-ins. All regions saw YoY volume increases in H2 2020. While some markets like LATAM and Southeast Asia took time to recuperate in H2 2020, other regions like the US, Europe, India, and Africa bounced back and tried to increase supply and distribution-related activities.”

Highlighting that Apple had gained share in the secondary market, Research Director Jeff Fieldhack said, “There has been no slowdown in the appetite for Apple within the secondary market. In fact, over the past year, it has increased compared to its competitors. Apple’s share in the global market for new smartphones was just over 13% in H2 2020. Its share in the secondary market over the same period was over 44%. In addition, Apple’s secondary market ASPs (average selling prices) are almost three times higher than the average of all its competitors. Even with the rollout of 5G by over 150 mobile operators in over 70 countries, the demand and ASPs for Apple’s refurbished LTE portfolio remain elevated. This is helping Apple grow its installed base as many of the Apple buyers in the secondary market are first-time buyers.”

Additional trade-in offers and a focused approach on circular economy initiatives are fueling the demand in developed regions like Europe. In contrast, developing regions like India and Africa are showing a higher proportion of new businesses and improvements in domestic tech and repair capabilities. Cardoza added, “China is slowly becoming a more difficult market for the secondary market. There is still high demand, but costs have increased for key components. Also, there is more oversight at international ports. The China–US trade war has also added more risk, making many buyers more conservative in their purchases. We expect more secondary market volumes to move to other areas such as Africa, Japan, India, and Europe. There are established secondary market companies, with new companies also moving into these regions. There is also an appetite for flagships from premium brands but at mid-tier pricing.”

Background:

Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

Analyst Contacts:

Jeff Fielhack

Glen Cardoza

Follow Counterpoint Research
press(at)counterpointresearch.com

Global Refurbished Smartphone Market Fell 9% in 2020

Boston, Toronto, London, New Delhi, Beijing, Taipei, Seoul – January 20, 2020

The global refurbished smartphone market fell 9% YoY in 2020, according to the latest Counterpoint Refurbished Smartphone Market Update. The market saw a dramatic 16% decline in the first half of 2020 compared to the first half of 2019. It rebounded slightly in the second half of 2020 due to increases in new device sales and a very strong Apple iPhone launch cycle which helped the supply of devices in the secondary market. All major countries and regions showed a decline for the full year of 2020, mainly due to COVID-19.

Counterpoint focuses its refurbished smartphone market research on those devices which go through repairs and enhancements before being resold. Devices sold ‘as is’ are also tracked but not included in the refurbished market numbers. Refurbished smartphone volumes are important because these devices compete with new mid-tier devices.

Commenting on the secondary market, Senior Research Analyst Glen Cardoza said, “New device sales fell by around 9% in 2020 due to COVID-19 lockdowns and related economic deterrents. This reduced the number of upgrades and smartphones hitting the secondary market. The pandemic caused a significant number of smartphone owners to avoid or delay new purchases. Key secondary markets India and Latin America saw 20% and 24% declines respectively during the first half of 2020 due to strict and extended lockdowns.”

Exhibit 1: Key Country, Regional Refurbished Smartphone Growth Rates, 2020 vs 2019

Commenting on the decline in the refurbished market, Research Director Jeff Fieldhack said, “China, the most important country in the refurbished market ecosystem, saw significant declines during 2020. The Chinese refurbished smartphone market was hit by tensions between China and Hong Kong and trade battles with the US. Many resellers in the secondary market ecosystem avoided China due to more scrutiny by the Chinese government, the potential for higher import duties, and the rising cost of replacement parts.”

Positive signs

Not all segments of the secondary market declined. Cardoza said, “There were some bright spots in the refurbished smartphone ecosystem. Apple grew its share in the secondary market from 39% to 42%. There were some marketplaces in the secondary market which saw growth, such as Back Market and Recommerce. An increased number of new businesses dealing in preowned smartphones also sprang up. Despite the proliferation of 5G networks, average selling prices (ASPs) of refurbished LTE smartphones grew.”

Background

Counterpoint Technology Market Research is a global research firm specializing in technology products in the TMT industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analysis of the mobile and technology markets. Its key analysts are experts in the industry with an average tenure of 15 years in the high-tech industry.

Analyst Contacts:

Jeff Fieldhack

Glen Cardoza

Counterpoint Research
press(at)counterpointresearch.com

Global Refurbished Smartphone Market Declines 1% in 2019

San Diego, Buenos Aires, London, New Delhi, Hong Kong, Beijing, Seoul

June 10th, 2020

According to the latest research from Counterpoint’s Refurbished Smartphone Tracker, the global market for refurbished smartphones declined 1% YoY in 2019 reaching just over 137 million units. The latter half, especially the fourth quarter the market grew, as Apple upgrades remained strong. However, a 1% increase during the second half of the year was not able to offset the decline in the first half.

Commenting on the market dynamics, Jeff Fieldhack, Research Director at Counterpoint Research noted, “This is the first time in the last four years that the refurbished market has declined for the full year. The trend is mainly linked with the downturn in new smartphone sales in key regions like the US, China, and Europe. The sell-through in these regions combined declined 6% YoY during 2019. The upgrades in the premium segment also remained slow, as users continue to hold on to their devices and replacement cycles lengthen. Premium devices are key to refurbished device volumes in the mature economies. China, the largest market for refurbished devices, declined 4% YoY during the year. This was due to the combination of a sluggish economy and the fact that it is harder for players within the refurbished market ecosystem in China to make a profit. The China-US trade tensions have also affected the secondary market as many large players are being much more cautious on purchases. Many of the smaller players in the ecosystem have seen growth, but it was not the case with the larger players.”

Despite a decline in the overall market, there were several growth markets like India, Latin America, and Africa.

Commenting on these emerging regions, Varun Mishra, Research Analyst at Counterpoint Research, added, “The refurb ecosystem in these economies is at a nascent stage. In terms of smartphones, these markets remain underpenetrated. Many users are looking for affordable devices to come online. The transition from feature phones to smartphones and the aspiration of premium devices at an affordable price point continue to fuel growth in these markets. There is also the ongoing transition of the refurb segment from the unorganized sector to organized in countries like India which is opening opportunities. There still needs to be more consumer awareness, standardization in processes, and quality assurance to build consumer trust to fully tap the market potential in these regions. However, going forward, because of COVID-19, the growth of the segment will be impacted in 2020.

Other key themes in the refurbished market:

Apple and Samsung continued to dominate the secondary market in 2019. Flagship models continue to hold values strongly and hence are also preferred by the overall ecosystem players.
Apple continues to foster its trade-in and insurance programs. This also makes sense for Apple as it has been focusing on its service segment. The experience of these services is more enriched with the newer hardware, and a strong trade-in program can help users upgrade.
Samsung’s Galaxy S series is the main driver for Samsung. The company is getting more aggressive with buy-back programs and adding more repair partnerships. Certified Pre-Owned volumes are likely to increase in 2020. This area has been surprisingly low in 2019.
Huawei’s strength in new sales and brand building efforts has helped it increase its presence within the used/refurbished market. But the US sanctions are likely to hurt sales and the brand outside of China in 2020 unless an agreement is made within a China-US trade deal.
There has also been an evolution of the repair market especially in the US and Europe, which is also shaping the refurb industry. The Right to Repair bill, which has now been accepted in over 25 US states, is also driving this trend.

BONUS Podcast: Hit the play button to listen to it

Background:

Counterpoint Technology Market Research is a global research firm specializing in detailed industry analysis of the TMT sectors. It services major technology firms and financial firms with a mix of monthly reports, customized projects, and detailed analysis of the mobile and technology markets. Its key analysts are experts in the industry with an average tenure of over 15 years in high tech industries.

Analyst Contacts:

Jeff Fieldhack

Varun Mishra

Counterpoint Research
press(at)counterpointresearch.com

Podcast: Understanding the Opportunities & Trends in Global Refurbished Smartphone Market

The Coronavirus (COVID-19) pandemic has caused the global smartphone market to decline below 300 million in Q1 2020. As a result, we have also lowered our overall smartphone shipment estimates for the year 2020. The global market for refurbished smartphones also saw a 1% decline in 2019. Given the current economic conditions and global downturn, the user buying pattern is expected to change. But it does bring new opportunities for the refurbished smartphone market.

Despite a decline, Apple and Samsung continued to dominate the secondary market in 2019. But how does the refurb ecosystem work? Which are the key refurb smartphone markets? Once the smartphone enters the refurb ecosystem, a fair amount of work goes into making it sellable. So, what are the typical repairs that are carried out?

Host Peter Richardson and research analyst Varun Mishra discuss the key trends and opportunities in the global refurbished smartphone market in the latest episode of “The Counterpoint Podcast.” The discussion also touches upon the replacement cycles and the refurb market in India.

Hit the play button to listen to the podcast

Also available for listening/download on:

Global Refurbished Smartphone Market Declines 2% During H1 2019

Global Refurbished Smartphone Market Declines 2% During H1 2019

India, Latin America, and Africa were the only geographies where the secondary market grew

Uncertainties from the China-US trade war made the secondary market ecosystem focus more on Apple and Samsung.

San Diego, Buenos Aires, London, New Delhi, Hong Kong, Beijing, Seoul

September 11, 2019

The global refurbished smartphone market shrunk 2% year-on-year (YoY) in H1 2019 to 64.6 million units, according to the latest research from Counterpoint’s Refurbished Smartphone Tracker. In the same period last year, 66 million devices hit the secondary market. The small drop is mainly due to the decline of new device sales, which restricted supply and the continued growth of the secondary market. Secondly, the China-US trade war had a dampening effect on the mood in the secondary market.

Commenting on the size of the secondary market, Associate Director, Tarun Pathak, highlighted, “The secondary smartphone market declined because large donor regions, such as Western Europe and North America, saw clear declines in new device sales. Upgrade cycles of premium devices, which fuel the secondary market, were especially weak as holding periods continued to increase. Finally, the continued uncertainty of the China-US trade war made the secondary market ecosystem more conservative. A new tariff will have a crippling effect on the secondary ecosystem. This forced many companies to think short-term in case a new tariff was implemented.”

Key Country and Regional Refurbished Handset Growth Rates

India, Latin America, and Africa were the only countries or geographies which saw growth in the consumption of secondary market devices. All other countries and regions saw a decline in sales of used devices. With the drop in overall volumes, consolidation continued within the ecosystem.

Research Director, Jeff Fieldhack, added, “During H1 2019, most margins tightened within the refurbished and used device ecosystem. This has led to consolidation within the industry—both horizontal and vertical integration. We saw many key players add more services. For example, some of the key collectors who focus on sorting, diagnostics, and grading added some repair services. As scale becomes more important, we expect to see more consolidation and vertical integration.”

Fieldhack added, “In some of the larger donor countries, there were shortages of A and B grade devices and supply did not meet the secondary market demand. This had a ripple effect on the ecosystem during H1 2019. This changed the flow of devices to Hong Kong and China. Since there were shortages of A and B grades, more C and D grades flowed to China. This helped the repair industry in China add value despite volumes falling.”

Other key themes that emerged during the H1 2019:

Many within the ecosystem concentrated even more on Apple and Samsung because of the uncertainty caused by the US-China trade war. Most believed this reduced risk as these two OEMs retain value higher than all other brands.
Some of the secondary market repairs business is moving outside of Shenzhen. It is not only new manufacturing leaving southern China. The secondary market saw an exodus, too, mainly to northern China. There was also a shift to other southeast Asia countries.
Huawei saw declines in the secondary market outside of China. The same pressures seen on new device sales occurred in the secondary market.
India continues to see the highest YoY growth in consumption of secondary market devices. Government policies and better trust will help the secondary market continue to grow into 2020 and beyond. Almost 82% of devices do not go into the secondary market, indicating that the market has a lot of potential to grow.
Samsung partnered with uBreakifix in 2018. This partnership has grown and is now eligible in over 300 stores nationwide. Both in-warranty and out-of-warranty repairs are completed on devices going back to the Galaxy S6 and up to S9 family. The S10 and Note 10 will be added soon. Look for other OEMs to partner with repair shops to get devices back into users’ hands more quickly and to save money on doing repairs in their certified factories.

Please feel free to contact us at press(at)counterpointresearch.com for further questions regarding our in-depth latest research, insights or press enquiries.

Analyst Contact:

Jeff Fieldhack

Counterpoint Research
press(at)counterpointresearch.com

You can also visit our Data Section (updated quarterly) to view smartphone market share Globally and from the USA, China and India.

Global Refurbished Smartphone Market Growth Slows to 1% in 2018

The secondary industry was affected by the 11% drop in new smartphone sales in key supply countries such as China and the United States leading to a decline in the availability of used devices

San Diego, Buenos Aires, London, New Delhi, Hong Kong, Beijing, Seoul

March 13, 2019

The global market for refurbished smartphones slowed to 1% year-over-year growth in 2018, reaching close to 140 million units, according to the latest research from Counterpoint’s Refurbished Smartphone Tracker. The secondary industry slowed due to the 11% drop in new smartphone sales in key supply countries such as China and the United States. The drop in new device sales led to a decline in devices flowing into the secondary market. However, this drop was partially offset by improvements in the secondary market’s ecosystem of collection, grading, repairing, and online/offline selling.

Commenting on the size of the secondary market, Tom Kang, Research Director at Counterpoint Research highlighted, “The refurbished smartphone market cooled because of the slowdown of new device sales. The US and China markets saw lower upgrade cycles in 2018, which affected the flow of devices into the secondary market. In addition, China and US trade tensions held up devices in customs much longer than normal. This was especially true during the first half of the year.”

Kang added, “There were areas of growth. The India market grew 14% to almost 14 million refurbished devices. This is an impressive number because the refurbished market ecosystem remains nascent in the country and 72% of devices in India do not go into the secondary market. Therefore, there are tremendous growth opportunities.”

Exhibit 1: Key Country and Regional Refurbished Handset Growth Rates

Jeff Fieldhack, Research Director at Counterpoint Research added, “For the refurbished market to expand in new markets, the grading system must be standardized and improved. This is especially true in emerging markets where there is limited oversight and limited protections for consumers if the quality is lower than advertised. There will be improvements as the industry is using new technologies such as artificial intelligence to predict device usability and lifespans. There are also new software solutions being developed which will revolutionize grading. This will vastly improve on today’s diagnostic checklist. The next generation of diagnostic tools will be able to test many more components of the smartphone with the result being a much more qualified grading system.”

Other key themes which will help the industry in 2019 and beyond:

Apple and Samsung continue to dominate the refurbished market with 70% market share. Many within the refurbished ecosystem cater only to these two customers because their residual value is so much greater than the remaining field. Huawei is growing in popularity, especially in South East Asia.
New business models and more marketplace companies entering the ecosystem. There will be numerous more online and offline business models. This will make it easier for consumers to find appropriate refurbished devices and sellers to find buyers.
Recognized tier one distributors and service centers continue to become more vertically integrated with greater scale.
More government ‘green’ policies are being enforced. This includes right-to-repair laws and more leniency importing and exporting of used devices.
Higher percentage of refurbished devices are sold with warranties. This greatly helps overcome consumer hesitancy to purchase refurbished devices

Please feel free to contact us at press(at)counterpointresearch.com for further questions regarding our in-depth latest research, insights or press enquiries.

Background:

Counterpoint Technology Market Research is a global research firm specializing in detailed industry analysis of the TMT sectors. It services major technology firms and financial firms with a mix of monthly reports, customized projects and detailed analysis of the mobile and technology markets. Its key analysts are experts in the industry with an average tenure of over 15 years in high tech industries.

Analyst Contacts:

Jeff Fieldhack
+1 858 603 2703
jeff@counterpointresearch.com

Tom Kang
tom@counterpointresearch.com

Follow Counterpoint Research
press@counterpointresearch.com

Growth of Refurbished Smartphones in Emerging Markets

According to Counterpoint’s refurbished handset tracker, the global refurb market is growing faster than that of new smartphones market, as consumers increasingly turn to refurbished phones amid increasing prices of new devices from leading brands. The global refurb market grew 10% YoY in Q2 2018 in stark contrast with the market for new smartphones, which declined 1% annually. The trends are linked.

Several factors are contributing to the steady growth in refurbished phones. The price point remains a key factor, of course. But this goes together with an increasing level of professionalism in the refurbished device ecosystem. This, in turn, means that leading channels, such as mobile operators, are willing to distribute refurbished handsets – usually with things like warranties that lower the perceived risk for consumers to buy a refurbished device. And the trend has also been noted by broader mobile ecosystem players that have observed that there are often better profit margins available than with new smartphones.

As consumers upgrade, they are preferring to sell their old devices into channels and use the value to offset the cost of the upgrade. Device exchange programs by operators, retailers, OEMs and e-commerce players are fueling the trend in both developed and emerging economies. This, in turn, is increasing the volume of devices in the refurb channels. The share of preowned phones that are being put in draws has been steadily reducing over the years. As compared to 2017 Q2, there has been a 7% increase in preowned devices which are sold into the channels (OEMs/operators/retailers).

Exhibit 1: Refurbished Smartphones vs New Smartphone Shipments YoY Growth in Emerging Refurbished Markets – 2018Q2Source: Global Refurbished Handset Tracker

China remains the largest market for Refurb in terms of volume while India has seen the highest year on year growth at 41%. In price-sensitive economies like India, Thailand and Vietnam consumers are preferring low-cost / refurbished devices over new devices. Growth will be further fueled in India as large e-commerce giants like Amazon and Flipkart expand into refurb markets, offering device return policies to build consumer trust. Africa is also growing its refurbished market infrastructure steadily. Nigeria has a robust market for used phones but a large part of it is dominated by used devices sold through gray markets. These devices generally come without accessories or warranties and refurbished market players can tap into this current gap. Large players, like Brightstar, are eying these emerging economies. As more refurb players enter and build consumer trust, these markets will grow.

Apple remains the top preference in the refurbished segment globally due to a variety of reasons:

High residual value: iPhones depreciate much less than products from other brands.
The design consistency from version to version means that a refurbished iPhone 7 is difficult for the casual observer to distinguish from an iPhone 8. This changes with the iPhone X, but will find a new level.
Apple’s vertical integration means that new versions of iOS are updated to older products, meaning that most applications will run perfectly on previous generation iPhones.
The players in the refurbished ecosystem also prefer premium devices like Apple as they offer the best margins and most stable pricing.

Apple and Samsung together captured over one-third of the total refurbished handsets market globally. Chinese brands that are making a mark in the new smartphone category are yet to create a dent in the refurbished market. When they do it will mark a new level of maturity for them.

Going forward, growth in the refurbish segment will likely continue and the popularity of refurbished handsets will increase in emerging economies where consumers have limited income to buy expensive new flagship devices.

The analysis is part of our Global Refurbished Handset Tracker. This report covers the refurbished market in exhaustive detail by analyzing the refurbished market by region, setting out key players in each region and thereafter drilling down into each region and comprehensively analyzing important metrics. It concludes by setting out Global/Regional ASPs for refurbished smartphones that further adds detail to the overall picture of the refurb market. Please reach out to sales@counterpointresearch.com for more details.

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Coverage: Refurbished Market Tracker

No Let-up in India Refurbished Smartphone Market Boom

Important factors shaping the Indian market

2021 Outlook

Related Posts

Global Refurbished Smartphone Market Fell 9% in 2020

Positive signs

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Global Refurbished Smartphone Market Declines 2% During H1 2019

Global Refurbished Smartphone Market Growth Slows to 1% in 2018

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Important factors shaping the Indian market

2021 Outlook

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The Surge in H2 2020

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Positive signs

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Other key themes in the refurbished market:

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