Refurbished smartphones: Buying devices as new at discounted prices is spreading on a global scale, and the reasons are many (spoiler: it’s suitable for everyone)
Refurbished sells more than new units. This is big news in the smartphone market, which unlike other products until a few years ago, remained tied almost exclusively to the sale of new models. The turnaround has surged over the past few years, and there are many reasons for this. The Covid-19 pandemic that led to the closure of so many businesses and forced millions of households to revise their spending plans was one of the predominant factors because buying refurbished top-of-the-line smartphones while saving a lot of money is too much of an opportunity for those who want the latest product but cannot afford it.
How the smartphone market is changing – Refurbished Smartphones
However, the increased popularity of refurbished products is also linked to other prerogatives: the rise of a certified program for guaranteed purchases. The second relates to greater consumer awareness of environmental issues and the need for a more sustainable lifestyle with attention to recycling items. Also favoring the refurbished market has been the semiconductor crisis, which has wiped out all manufacturers’ inventories and lengthened delivery times for new units, convincing quite a few people to try the safe and guaranteed used route. Also crucial will prove to be the ‘right to repair‘ sought by the European Parliament (the institutional process is expected to be concluded in the third quarter of 2022), which aims for legislation that ensures a longer life cycle for products through a safe and more accessible repair procedure, which succeeds in spreading the culture of the circular economy, necessary to alleviate the 4 billion e-waste generated each year in Europe.
Before we look at the numbers and market outlook, let’s clear our doubts and specify what a refurbished smartphone is. It is an original product in identical condition and functionality to new, as it has been returned to the retailer or used for promotional purposes in stores, fairs, and similar initiatives. The law stipulates that when a device has been turned on at least once, it can no longer be sold as new, so the manufacturer or specialized companies take care of testing it to assess its external condition and function, repairing it with new, original parts where necessary. After that, sanitization of the product is triggered, all the way to packaging for sale as refurbished at affordable prices. The smartphone that fails any of these steps can only return to the market as used, which is not the same as refurbished. This is a common mistake, but the reconditioned product is not second-hand and undergoes the proper maintenance before being sold and relies on warranty and after-sales services.
In 2021, the smartphone market recorded sales of about 1.39 billion units globally, up 4.5% from the previous year. The first positive annual close since 2017, however, depends on the 2020 flop, with the disaster due to the Covid-19 pandemic forcing the prolonged closure of Chinese factories and significantly reducing the purchasing capacity of consumers worldwide. According to Counterpoint Research reports, the market for refurbished smartphones in 2021 grew by 15% compared to the previous twelve months. Reasoning geographically, however, we see a very different sales surge: in Europe and China there was +10%, in developing areas such as India and South America, on the other hand, the rate rose by 25% and 29%.
Marketplaces where to buy safe and reliable refurbished devices
The spread of purchases of refurbished phones has led to an increase in companies dedicated to the specific market segment. One of the best known, along with Rebuy and Refurbed, is Back Market, a French company founded in 2014 by Thibaud Hug de Larauze, Quentin Le Brouster, and Vianney Vaute that sells refurbished devices, not just smartphones, in 16 countries (14 Europeans plus the U.S. and Japan) and has offices in New York, Berlin, and Bordeaux, in addition to its headquarters in Paris. In the past year, the company has raised $845 million from investors, with the marketplace on which third-party companies offer refurbished products with the option for customers to return purchases and get a refund within 30 days. More than 6 million customers have so far bought devices on Back Market, which hopes to elevate the circular economy provided by refurbished products to an immediate solution for purchasing technology devices.
Another European company specializing in refurbished iPhones is Swappie, founded in Helsinki in 2016 by Sami Marttinen and Jiri Heinonen, which closed a €108 million Series C round last February accelerate growth in European markets. Present in 15 markets and poised to strengthen operations in Germany and Italy after recently surpassing the first million devices sold with a 12-month warranty, Swappie has two factories in Estonia and Finland in which it refurbishes iPhones and will increase its workforce of employees and contractors to 2,200 by the end of the year. The company motto is “to make buying a refurbished smartphone as common as buying a used car is.”
CertiDeal, active in Italy, Spain, Sweden, Belgium, and Portugal in addition to its own country, was also born in France. Founded in 2015 in Levallois, in the Paris hinterland, it ended 2021 with sales of 34 million euros, selling mainly iPhones, Samsung smartphones, iPads, and Macs. So far, it has placed products with just over 300,000 consumers, attracted by a 24-country warranty (like most new smartphones), promotions of up to 70 percent on the cheapest products, and a commitment to reduce planned obsolescence and waste in the tech sector.
Also driving the growth of refurbished smartphones are manufacturers, led by Apple and Samsung, and certified programs dedicated to the sale of tested and fixed devices by large companies. One of the most recent examples is eBay’s initiative, which has selected sellers on its platform and closed deals with some of the most popular brands and well-known retailers in various international markets to offer refurbished products at affordable prices. In addition to smartphones, the program includes smartwatches, small appliances, notebooks, tablets, and headsets. Every two months, the catalog will be updated with new models and expanded with the availability of devices from new companies, plus free shipping and returns within 30 days.