Startups, SMEs buy refurbished devices to address chip shortage

Delhi-based Cashify has seen demand for laptops grow five-fold in 2021, while demand for smartphones has more than doubled in the last 12 months, especially from smaller companies with 30-40 employees. Mandeep Manocha, Co-Founder and CEO, Cashify said, “65-70 per cent of the demand for laptops came from the business side.”

“In the past, all these companies used to buy new smartphones or use device forms of Amazon Web Services (AWS) or other such services. Now they get a refurbished device at 30-40% discount; A very significant portion of our SMB demand is actually coming for smartphones, especially on the testing side,” Manocha said.

According to Kolkata-based Hyperexchange, the overall refurbished electronics market in India is growing at a compound annual growth rate (CAGR) of 80%. The growing interest of small businesses and startups in refurbished laptops and smartphones will drive the growth in this segment. However, the primary customers for HyperExchange are still individual buyers. However, the company has seen demand from both the corporate and consumer segments growing at an “unprecedented pace”.

According to Dipanjan Purkayastha, co-founder and CEO of HyperExchange, a growing number of SMEs and startups have started using refurbished products especially under leasing and rental programmes. He added that about 31% of SMEs and startups among its customers are focused on buying or renting refurbished laptops, while 68% want desktop computers. On the other hand, 88 percent of the consumer segment was focused on buying mobile phones.

However, Purkayastha acknowledged that his company is primarily a consumer-focused brand and corporate business accounts for less than 5% of its revenue.

According to Glenn Cardoza, senior research analyst at Counterpoint Research, demand can vary from company to company.

“Older companies in the renewed sector are more likely to have tie-ups with larger companies and have a distribution network for B2B deals than a new company. We are seeing more commercial buyers looking for refurbished equipment. There is a good supply in the refurbished market as many more people now trade in old equipment,” he said.

Cardoza has a point. Structured refurbishing businesses with an online presence, and doorstep pick-up options are now driving more people to trade in their equipment. Unlike the new equipment market, where the supply of many devices was disrupted due to global chip shortages, refurbished suppliers were able to procure and supply equipment for both individuals and businesses.

Experts also pointed out that the demand for refurbished equipment is no longer coming only from metro cities, which reflects a shift in perception towards the use of refurbished equipment for work. Manocha has seen a lot of demand from cities like Bhopal, Mangaluru and Indore. His company also makes sure that the data stored on all devices is completely erased using a certified eraser tool before selling it.

The shopping preference for small businesses has also worked in favor of refurbished suppliers. Unlike large companies, which tend to be fussy about brands, small businesses usually buy products with certain specifications regardless of the brand.

To meet the growing demand for PCs in India, refurbished suppliers like Cashify are planning to intensify their procurement efforts for laptops.

“We are now putting resources into expanding our laptop refurb capacity and moving to a larger refurbishment center in the next four to five months,” Manocha said.