Lurking somewhere behind the booming smartphone segment is an active 'seconds' market. And, hasn't it always been there?
Go back by a decade, and most of us will remember walking into a local mobile store, and exchanging our older phone for a new/used shiny device. In the last couple of years, the e-commerce space has tried to emulate the same online, with a push given especially by premium brands like Apple and Samsung, often with their full page advertisements persuading consumers to exchange older devices. And, there are many online players helping ecommerce companies and others achieve just that. There is an entire ecosystem for the seconds market like Quikr, OLX and Ebay, and one such is Cashify.
Cashify is basically involved in disposing off your old electronics through an online/app journey that includes doorstep pickup service, and also instant payment of your choice. Fort doing so it has teamed up with some of the major online as well as offline players including Snapdeal, Amazon, eBay, Croma, Google and HP, among others. CEO, Mandeep Manocha tells us that, "Cashify has build custom software interface and embedded these in many such e-commerce players enabling them to offer exchange as a sales promotion to their customers from an affordability perspective."
Cashify is now out with its internal research report showing the peculiar pattern of the exchange market conducted over a sample size of 90,000 users (in the period August to October). To begin with, it says 40 used smartphones are being traded in the second hand smartphone market for every 100 new smartphones. And, the average selling price of 70 percent of the phones sold were in the range of Rs 4,000 to Rs 6,000.
The report shows a massive growth in buyback in the month of October, which could be possibly owing to the festive season. But, the number of unique models traded online were higher in August compared to October.
And, only 7-8 percent of all devices traded are above Rs 18,000 in value, and this constitutes mainly of iPhones and some high end Samsung devices. However, Manocha explains the demand may be dynamic but the brand perception remains largely unchanged. That pretty much explains why the iPhone shows the slowest depreciation rate. However, when it comes to exchange of devices, Samsung leads by a good margin. The reason is simple Samsung release phones on varying price point and is still the seasoned OEM that has been conveniently filling the gap left by Nokia. Then, we also have the likes of Chinese vendors such as Xiaomi and OnePlus, among others who have managed to become a part of the market.
In terms of the brand share, 65 percent share in the second hand smartphone market has been captured by four brands – Samsung, Apple, Motorola and Micromax.
"Brands like OnePlus and Xiaomi and Lenovo have significantly added to the secondhand market options both in terms of price-points and device variety, as they have to the new device market. The market acceptance of such brands has further driven their second hand demand," he added.
He also points out a significantly lower refresh cycle for low priced second-hand devices "With the entry of an array of low priced devices that have captured large market share has seen a fair number of such phones further entering the second hand market. Such devices will not only have a lower first refresh cycle but an even lower second refresh cycle. So customers buying low priced second-hand phones would find themselves needing to replace their device much sooner than expected. A secondhand customer who would have ideally come back to the market for another second hand device in a 6 to 11 months is now back in 3 to 6 months. This keeps the demand going," he said.
Cashify survey also reveals that Delhi saw the maximum second-hand phone sale, followed by Bangalore and Mumbai.