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How online education is driving the growth of second-hand smartphones in India

As online classes seem poised to become the norm till a vaccine is found for the Covid-19 pandemic, sales of pre-owned phones and refurbished devices are expected to grow in the world’s second-largest smartphone market.

Written by Anuj Bhatia | New Delhi | Updated: August 13, 2020 8:11:39 pm
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The demand for second-hand smartphones is surging in India as across the country parents look for devices that can be used to get their children to take online classes. As online classes seem poised to become the norm till a vaccine is found for the Covid-19 pandemic, sales of pre-owned phones and refurbished devices are expected to grow in the world’s second-largest smartphone market.

“One of the interesting trends we have seen during the pandemic is that a lot of people have started to buy devices for their kids,” Mandeep Manocha, co-founder and CEO, Cashify, told indianexpress.com over a phone call. “We saw a completely new pocket of demand coming up where parents are buying devices for their kids.”

Manocha said the demand for pre-owned phones is coming from across the country, though consumers from tier-3 and tier-4 cities are more inclined towards buying a used smartphone. Previously, tier-3 and tier-4 cities used to contribute 20 per cent of demand on Manocha’s platform but now it has jumped to 35 per cent.

second-hand smartphones, used smartphones in india, refurbished phones in india, olx, cashify, coronavirus pandemic, used iphone in india, used oneplus On Olx, the most popular price range for used smartphones is the sub-Rs 15K category. (Image credit: Sneha Saha/Indian Express)

Pre-owned goods seller Olx has also seen a spike in demand for pre-owned devices, especially smartphones, during the pandemic. In fact, in the month of July, Olx saw a 109 per cent growth in the mobile category on the platform.

“Work from home is definitely driving the growth,” said Tarun Sinha, Head Horizontal business unit at Olx India.“So if you look at the demand side of the ecosystem, there is a 40 per cent growth and even on the supply side there has been a 71 per cent growth in the month of June over May.” Apple, Samsung, RealMe, Oppo, Vivo, Oneplus and Xiaomi are the major smartphone brands in the second-hand phone market, as per Olx.

Spike in sales of refurbished and second-hand smartphones over the past few months shows that consumers are responding to the economic uncertainty created by the coronavirus outbreak. “The impact of Covid-19 will help feature phone users understand the importance of smartphones and propel the trend of transition from feature phones to smartphones, which would further translate into the demand for refurbished devices,” said Varun Misra, an analyst with research firm Counterpoint.

second-hand smartphones, used smartphones in india, refurbished phones in india, olx, cashify, coronavirus pandemic, used iphone in india, used oneplus A used iPhone 5s can be bought for as low as Rs 7,000 on Cashify. (Image credit: AP)

It’s not only the coronavirus pandemic that is driving the second-hand smartphone market in India, he said. The upgrade offers launched by OEMs, where consumers can trade-in their old phones and get a new device for a slightly cheaper price, is increasing the supply of phones in the refurb ecosystem. “A refurb device is a viable option for first-time mobile phone users, wanting to come online affordably, or a user seeking an aspirational flagship device at a lower cost,” he explained. The refurbished market in India is over 10 per cent of the new smartphone market, estimated Counterpoint.

A sharp increase in the uptake of used phones can also be due to the fact that smartphone prices have gradually increased in recent years. While premium phones like the iPhone and Galaxy S flagships have always been expensive, the price of entry-level phones has been steadily rising. “If you look at the price trends of the devices over the last three to four years, it was really surprising to see the prices have actually gone up,” said Manocha.

With base variants of the entry-level phones from Xiaomi and Realme costing north of Rs 8,000, consumers were left with no option but to choose a used phone at a lower price. In the case of Xiaomi, even though it wants to be seen as the people’s brand, the fact is that the company is moving up the ladder both in terms of pricing and product portfolio. “Xiaomi has recently launched the Mi 10 for Rs 50,000. It’s not a Xiaomi or Redmi behaviour,” he said.

However, the surge might be temporary. “Once things normalise and educational institutes re-open, the dependence on mobile for education will reduce,” said Misra, who is concerned that studying on a phone has its limitations like smaller screens because of attention spans and bad networks.

Nevertheless, the analyst predicts that as the refurbished market becomes more organised, the demand for second-hand smartphones will increase. “The major reason for people to buy a refurbished phone is to fulfil their aspirations,” Manocha said. “The only way of upgrading in life is either buying something new for the full price or buying a used phone.”

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