The second hand and refurbished smartphone market has fully recovered from the lows of past two months marred by the COVID second wave and is already outpacing the recovery of the fresh market as wary consumers seek quality devices at lower prices.
But component shortage and rising costs have caused disruptions in refurbishing second hand devices, say companies.
Smartphone and accessories recommerce marketplace Cashify said although sales were down by 55 per cent due to the COVID second wave, sales in June are already on track to cross March numbers.
Consumer-to-consumer online marketplace OLX said demand for pre-owned smartphones and laptops had fully recovered back to the calendar first quarter levels. The months of March and April witnessed a 14 per cent dip in demand owing to the second wave, while in May the demand has recovered completely.
In fact, the demand for tablets has improved in the month of May and even surpassed January levels after witnessing a decline in the months of March and April. iPads now account for 40 per cent of the total listings in the category, OLX said.
The Aforeserve Group, which owns re-commerce marketplace Xtracover.com, said the refurbished devices business is likely to grow by two times in the coming months as restrictions ease with consumers inclined towards certified products from organised refurbished players.
“Whenever there is economic uncertainty, people tend to gravitate towards pre-owned goods as they want to conserve their budgets and their appetite to spend decreases,” an OLX India spokesperson said. “Throughout the 1st and the 2nd wave, we saw that demand for pre-owned goods in general continued to grow faster vs their new goods counterparts.”
Tier 3 cities have shown the highest growth in demand, contributing to 50 per cent of the demand for mobiles and 40 per cent of the demand for laptops between January-May, OLX said.
“COVID-19 has resulted in not just health insecurities but also affected the finances of people…with the unlock in progress we are already seeing an uptrend in sales and we’re on track to cross March numbers this month,” said COO & Co-Founder, Cashify, Nakul Kumar.
In the pre-owner market, Mi stood as the number one selling brand with a 26 per cent share followed by Apple (20%), Samsung (16%), Motorola (6%), VIVO(6%) and Oppo(5%), according to Cashify.
But supply challenges are proving to be a hurdle for the refurbished market.
Cashify’s Kumar said the company has faced restrictions in import from China and is exploring sourcing parts from Vietnam and Taiwan.
Xtracover’s Soumitro Gupta said laptop repairs are taking as long as 30-45 days due to severe shortage of parts and companies reluctance to service smaller orders.