Is the smartphone market in India booming? With small sellers driving 77% of sales, reports predict 8% annual growth, surpassing the new smartphone market. Startups are also emerging, fueling this rapid expansion!
India’s refurbished smartphone market is seeing a surge in growth, as the unorganised sector contributes 77% of the total sales. According to a report by Counterpoint Research, it is expanding faster than the new smartphone market, thanks to smaller retailers and distributors offering services such as cash on delivery (COD), part-payment-based delivery, credit facilities, and warranty options to meet rising consumer demand.
Consumers in India are choosing used smartphones due to rising device prices and a desire to own quality devices without overspending. With only a third of the 650 million smartphone users having 5G devices, the price gap and limited availability of affordable 5G phones drive many to opt for mid-priced used models.
Last month, looking at the growing used smartphone market, International Data Corporation (IDC) predicted that 20 million used smartphones will be traded in India in 2024, showing a year-on-year (YoY) growth of 9.6%, surpassing the 154 million new smartphone units expected to be shipped, which will grow at a 5.5% YoY rate. At this pace, India’s used smartphone market is set to grow at 8% compound annual growth rate (CAGR), reaching 26.5 million units annually by 2028.
According to Counterpoint, India’s refurbished smartphone market has a distinctive distribution structure. In terms of collection, organised retail accounts for 52%, while unorganised retail makes up 48%. Large volumes of defective devices, display models, and returns are auctioned off and reach the unorganised sector, where they undergo repair and refurbishment before being resold with warranties.
In contrast, the unorganised sector lacks formal refurbishment processes, and devices are often resold without warranties. When it comes to sales, organised retail—both offline and online—accounts for only 23% of total sales, while the unorganised sector, mostly offline, makes up 77%, reselling smartphones to consumers and businesses.
The shift towards a more active integration of smaller sellers into the smartphone supply chain emphasises the importance of trust and convenience with services like COD, part-payment plans, and warranties.
Despite larger players in the organised retail and e-commerce sectors holding on to the most sought-after A-grade smartphones, the unorganised market—comprising smaller, fragmented sellers—is thriving. These sellers have found success in reviving and selling low-grade used smartphones, particularly in tier 2 and tier 3 cities where demand is growing rapidly.
With this, businesses are benefitting from increased transparency and better connections with other small retailers. Smaller sellers now can choose smartphone volumes and grades, allowing them to order bulk devices based on specific repair needs.
Besides, everal startups like Cashify, Budlii, Instacash, and Yaantra are organising India’s unstructured used smartphone market, building consumer trust through marketing and omnichannel strategies. Cashify, with over 200 stores in 100 cities, leads the market, while Yaantra, owned by Flipkart, focuses on online sales and limited offline partnerships with Airtel in Delhi and Hyderabad.
As demand for refurbished smartphones is on the rise, particularly in smaller towns, India’s secondary smartphone market continues to evolve rapidly, with unorganised sellers playing a pivotal role in this transformation.
Additionally, this growth will make smartphones more affordable, boost adoption, address e-waste, and create employment opportunities, benefiting both consumers and vendors.
