New Delhi Indian buyers are increasingly turning to refurbished electronic components as global supply chain disruptions affect the prices of new products. While smartphones are the primary growth driver, other electronic products have also seen increasing demand amid the growth of organized sellers of refurbished goods.
According to a report by the research firm redseer On May 5, IT services major Tata Consultancy Services Ltd receives 100,000 refurbished laptops every year from organized reverse commerce (or recommerce) companies.
Redseer said the refurbished electronics goods market in India could grow to $11 billion in gross value by March 2026, up from about $5 billion in March 2021.
Siddhartha Surana, Engagement Manager, redseerLtd. said it will invest about $1 billion in laptops, televisions, headphones, wearables, washing machines and gaming consoles. “In India, wearables that can contribute to this area will be aspirational, such as the flagship Fitbits or Apple Watch,” he said.
Growth has prompted businesses to become more organized. Organized sellers accounted for only 1% of the market in fiscal 2016 and sales of about $20 million, which increased to 8% and $400 million in fiscal 2011. By FY26, organized sellers are expected to overtake the rest of the industry and account for 20% of the market and contribute $2.2 billion in sales.
The growth in sales of refurbished products has also attracted large e-commerce players. Whereas heroine Selling refurbished products since 2017, Flipkart acquired refurbished electronics marketplace Yantra in January.
Nakul Kumar, Co-Founder and Chief Marketing Officer, Cashify said that the majority of sales of refurbished devices are driven by smartphones. “Cashify accounts for about 5-6% of the business from refurbished laptops, which grew last year due to the demand for devices driven by the pandemic. Other accessories account for 2% of Cashify’s market, while smartphones account for 92%.”
The Redseer report also states that the share of smartphones in this segment is 90%. Two factors driving this growth are rising new smartphone prices and higher profit margins for retailers.
“Factors such as remote work and education, reduced demand due to closure of markets in the wake of the pandemic, tight finances and limited supply, were the major reasons why the renewed market for smartphones saw a sharp growth in 2020 to 2021,” it said. Glenn Cardoza, Senior Research Analyst, Counterpoint Research, said, “Refurbished smartphone sales in India saw a year-on-year growth of nearly 25% in 2021.”
Redseer said, while a basic smartphone starts at $90 ( 6,800) Today in India, a similar used smartphone costs $30 ( 2,300). For retailers, while new phones have a margin of around 5%, used phones can bring them up to 8-10%.