Used smartphone market to touch $10 bn value by FY26: RedSeer report

India’s used e-commerce industry is expanding fast, led by strong growth in the sale of refurbished smartphones.  According to consulting firm RedSeer, the increasing demand for affordable yet branded smartphones has opened a new market for the sellers which will likely touch $10 billion value by FY26. Overall, the used electronics industry in India is growing at the rate of 16 per cent CAGR to reach $11 billion by FY26.

The report points out that the used smartphone market is seeing better margins for retailers compared to the sale of new smartphones. In 2021 alone, India witnessed the purchase of over $15 billion worth of new smartphones online. With the number of smartphone users reaching the 550 million mark, it is estimated that, on average, a recommerce app user sells more than two smartphones from each household when the need to upgrade to new devices rises, as per RedSeer's research.

Recommerce, or reverse commerce players are addressing pain points that the traditional phone market used to face.

The RedSeer analysis pointed out that some of the challenges faced by the traditional sector include lack of transparency in pricing, tedious time-consuming buying process, poor quality of used products which do not have any warranty and a lack of digital presence for purchasing. On the other hand, new-age tech players are solving using C2C, C2B, and C2B2C models that not only address the above pain points, but also offer better experiences to consumers. Strong network effects, supply-chain efficiencies, and omnichannel presence are a few offerings of these players, which consumers seem to love, as per the report.

“The refurbished market today is providing a rich opportunity to both users and companies. The growing popularity of e-commerce platforms for used and refurbished smartphones is driving the market demand. Because of the rapid technological innovation in consumer electronics along with increasing tech savviness, Indian users are frequently changing to newer devices,” said Siddharth Surana, Engagement Manager, RedSeer.

“Also, due to the pandemic, large numbers of unorganised channels got disrupted by organised digital recommerce players which led to the requirement of used electronics. Used devices prove to be a more cost-effective alternative to consumer’s growing needs. Refurbished products are a growing resource for consumers to try out new products from their favorite brands and to be more sustainable and price-conscious in their buying behavior,” he added.