India second-hand smartphone market to generate revenue of $4.6 billion by 2025

Over 25 million units of used smartphones were traded in 2021 with an average selling price of Rs 6,916 or $94, generating $2.3 billion in revenues, making India the fastest-growing market for second-hand smartphones with a growth rate higher than the overall smartphone market, according to a report by the India Cellular and Electronics Association (ICEA) and International Data Corporation (IDC).

The report said that India's secondhand smartphone has the potential to rise to 51 million by 2025, generating over $4.6 billion in revenue.

Kiranjeet Kaur, Associate Research Director, Mobile Phones Research, IDC Asia Pacific stated, “India is the second-largest smartphone market globally, but also one with very low smartphone penetration, despite millions of smartphones sitting idle in people’s homes.”

According to the findings, 78% of the users buying a secondhand smartphone have a monthly income of less than INR30,000, and 18% have a monthly income of INR30,000<INR50,000 thus making the affordable price range a key factor in driving the demand for the second-hand smartphones.

India's smartphone penetration stands at 35% of the population in 2020 whereas mature smartphone markets have a figure of 80%+. There is a huge potential for growth and secondhand smartphones can help fill this gap along with new smartphones shipping into the country.

The second-hand market has been growing steadily in recent years, including 2020 and has a strong potential to grow in the upcoming years.

Amongst the consumer electronics devices, smartphones are the largest volume driver (90%+) in the secondhand market currently, and others such as laptops, smartwatches, gaming consoles, and cameras are picking up gradually.

IDC has predicted that the global smartphone shipments will reach 1.37 billion, growing by 7.4% in 2021 and is expected to reach 1.54 billion units in 2025 with a compound annual growth rate (CAGR) of 3.9% from 2020 to 2025.

Pankaj Mohindroo, Chairman, ICEA said, “India should be the global hub of remanufacturing and re-commerce by leveraging its delta of labour cost. Re-commerce's profound growth will effectively reduce the digital divide by enabling migration from feature phones to smartphones. The growth of this market will also ensure that there will be a significant drop in e-waste as recycling will become the new norm.”

The demand for smartphones in India is resilient, despite the drop during the lockdown periods. IDC has predicted a growth of 9% in 2021 reaching 158 million units.

The shipments were impacted in 2Q21 due to the lockdown during the second wave of the pandemic and remain uncertain due to the surge in Covid cases, credited to the Omicron variant.  The persistent supply chain constraints and rising component prices along with intensifying inflationary rates intensify the pressure on smartphone shipments.

However, the 5G shipments are expected to lift the market in 2022.

IDC also estimates that 90 million used smartphones will enter the secondhand market in 2021, in addition to another 60 million that are eligible for trade from previous years. More than 95% of all the secondhand phones are sold "As-it is" and the remaining 5% go through some kind of repair or refurbishment in India.