In European countries, particularly in England, the practice of selling used phones with the subsequent purchase of new models has been working successfully for the past few years. Every year, the number of people who want to use trade-in is growing, despite the pandemic and the difficult economic situation in Europe.
Testing the market with a pandemic: Wholesalers
The reaction to the start of the pandemic in the UK was mixed, with the closure of retailers and operator shops presenting opportunities for ones and problems for others. Wholesalers took the brunt of the attack. Resellers dealing with a large number of used devices together with retailers and operators have seen their supply reduced due to shop closures. Customers who preferred to buy devices via offline shops were forced to get used to the new environment - online shopping.
The pandemic has had a great impact on the supply of used devices in the UK and around the world. We are now seeing a lot less supply due to fewer phones being traded in and sold to retailers. For the secondary market to continue to function, there needs to be a steady increase in the products that can be offered to the consumer. With less supply, the secondary market suffers.
Fergal Donovan, PCS Wireless president for Europe
We were closed for a long time, but now things are slowly coming back to normal. We had two stores - now one of them is closed because of all these problems. It's a really difficult period now - economic crisis, high prices, low wages. We are trying to attract customers through good service and high quality.
Kevin, Lounge Repair, NSYS client
Recent analyst reports show that the smartphone market is emerging from a deep pandemic depression as consumer spending on electronics grows.
Online trade-in rises
While wholesalers were experiencing difficulties from the decline in trade-in with operators and retailers, trade-in companies buying handsets directly from consumers saw their business pick up. The big players in this area, who do not depend on the availability of physical shops, have benefited from the reduced competition - and not just from operators.
Envirofone, for example, stopped operating in March before parent Redeem went into administration in July before resuming operations last week under TES.
Mazuma Mobile has expanded its portfolio to include other electronic devices. Also, according to Craig Smith, their business is growing: "Since people are at home, they have time to do business with us, so our volumes have increased.
John Miller, CCO at musicMagpie, also reports an annual increase in mobile volumes on the back of customers getting increased exposure to the brand through staying at home and being online more.
Used smartphone market trends in the UK
In recent years, there has been a growing interest among consumers of second-hand devices in the topic of ecology and environmental concerns. This attention may provide healthy growth in the refurbished and used device sector, but there is another problem - there is still a global shortage of chips on the market, which in turn will hold back new products and sales of these devices.
The green revolution will continue to stimulate people to use refurbished devices. This sector will grow in 2022, and in the next few years, too.
John Fannon, Bastion Insurance
2022 will be the dawn of used devices - more environmentally friendly solutions.
Paul Jacobs, Exertis Commercial Director
Given the lack of innovation in new phones, I predict a further market deflation in new sales, with a shift coming due to the negative public perception of new technology and its impact on the environment.
Phil Kemish, Reboxed
The market is now witnessing several players making strategic investments and acquisitions to enter the growing second-hand smartphone market. According to research by CCS Insight, the popularity of refurbished phones tends to grow: 60% of consumers in the U.K. are considering buying a used phone.
The rising cost of devices, combined with a perceived lack of innovation in the marketplace, has led to increased upgrade cycles and slower sales of flagship phones. Many consumers prefer old models of their phones and do not want to pay for expensive phones when looking for a new one. These trends, along with an increased focus on sustainability, have led to a growing market for refurbished devices and an increase in the quality and availability of used devices.
Our consumer habits are changing and the time of the conscious consumer is coming. There is still some way to get back to pre-Covid levels, but there are clear signs that things are improving. The pandemic has set a vector for business that is likely to evolve in this direction. NSYS Buyback is what your business needs. It's an automated system for buyback and trade-in which can be used on a website, or via app, the perfect solution for online trade.