Refurbished units in demand as costs rise

NEW DELHI :

Indian consumers are more and more turning to refurbished digital units as international provide chain disruptions take up the costs of recent merchandise. While smartphones are main progress drivers, different digital merchandise, too, have seen rising demand amid the expansion of organized sellers of refurbished items.

According to a report by analysis agency RedSeer on 5 May, IT providers main Tata Consultancy Services Ltd sources 100,000 refurbished laptops yearly from organized reverse commerce (or recommerce) firms.

Redseer mentioned the refurbished electronics items market in India may develop to $11 billion in gross worth by March 2026, up from roughly $5 billion in March 2021.

Siddharth Surana, engagement supervisor, Redseer, mentioned laptops, televisions, headphones, wearables, washing machines, and gaming consoles will represent about $1 billion of the market. “In India, wearables that would contribute to the sector can be the aspirational ones, such because the flagship Fitbits or the Apple Watch,” he added.

The progress has additionally led companies to develop into extra organized. Organized sellers accounted for just one% of the market and about $20 million gross sales in FY16, which grew to eight% and $400 million in FY21. By FY26, organized sellers are anticipated to outpace the remainder of the trade and account for 20% of the market and submit $2.2 billion in gross sales.

The progress within the sale of refurbished merchandise has additionally attracted massive e-commerce gamers. While Amazon has been promoting refurbished merchandise since 2017, Flipkart acquired refurbished electronics market Yaantra in January.

Nakul Kumar, co-founder and chief advertising officer, Cashify, mentioned a majority of the sale of refurbished units is pushed by smartphones. “Around 5-6% of Cashify’s enterprise comes from refurbished laptops, which grew as a result of pandemic-driven demand for units final yr. Another 2% of Cashify’s market comes from equipment, whereas smartphones account for 92%.”

The Redseer report, too, mentioned smartphones account for 90% of the sector. Fuelling this progress are two components—rising costs of recent smartphone and better revenue margins for retailers.

“Factors resembling distant work and schooling, pent-up demand because of markets being closed within the wake of the pandemic, tighter funds, and constricted provides had been main the explanation why the refurbished marketplace for smartphones noticed sharp progress in 2021 over 2020,” said Glen Cardoza, senior research analyst, Counterpoint Research. “2021 saw a rise of nearly 25% year-on-year in India’s refurbished smartphone sales.”

Redseer mentioned whereas a fundamental smartphone begins at $90 ( ₹6,800) in India at the moment, the same used smartphone prices $30 ( ₹2,300). For retailers, whereas new telephones have a margin of about 5%, used telephones may fetch them as much as 8-10%.

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