Refurbished mobile market to shrink on short supply in 2025

New Delhi: After growing in double digits over the last three years, sales in the organised market for second-hand smartphones are set to fall for the first time in 2025, as short supply of traded-in devices plague refurbished brands.

In the January-March quarter of 2025, sales volume of refurbished smartphones for organised players fell 6% from the same period last year, according to market research firm CCS Insights, which cited an increasing shift in new smartphone sales from online to offline for this.

Old devices exchanged for new ones online often reach organised refurbished sellers, while those traded-in in the offline market end up with unorganised players.

According to the research firm, volumes fell to 1.3 million from 1.4 million in the first quarter of 2024. The numbers are expected to worsen in the remaining three quarters.

It predicts sales of refurbished smartphones to fall 5-7% in 2025 from last year when organised players sold around 5.7 million units. Sales had grown 22% in 2022, 16% in 2023 and 10%.

“India’s smartphone market is witnessing a fundamental shift as previously online-centric brands embrace offline retail for sustainable growth. With offline ASPs (average selling price) rising from US$196 to US$303 (Q1 2022-Q1 2025) compared to online’s modest growth from US$199 to US$246, the premium segment is thriving in physical retail,” said Canalys analyst Sanyam Chaurasia.

“This impacts the supply (of pre-owned devices) for online organised players because a majority of devices traded in offline, especially through local mom-and-pop stores, go to the unorganised channels. Only sales through large retailers like Reliance or Croma typically enter the organised sector,” said CCS Insights analyst Ekta Mittal.

Industry executives and market trackers said companies in the organised sector have started to anticipate annual supply constraints, especially during the May-July period when online sales typically go down. Players start building additional inventory in the preceding months and diversify sourcing channels and procuring directly from smartphone brands.

“A reason for the tighter supply is the shift of new smartphone sales towards offline segments. When exchanges happen offline, they are often sent to the unorganised sector and do not enter the refurbished supply channel,” said Saket Saurav, cofounder and CEO of ReFit Global, a refurbished smartphone seller.

The organised refurbished market is facing a shortage of around 30-35%, potentially up to 40%, of the required inventory based on demand for the last three-four months, Saurav said.

Another refurbished smartphone seller, ControlZ, said the industry is facing a 10-15% shortage in supply, especially for Android devices which are increasingly being sold through the offline route.

“Supply has always been an issue for organised players over the last one or two years. Organised players have diversified their supply channels to avoid dependence on any single avenue,” said Glen Cardoza, an analyst at Counterpoint Research.

While the overall market is growing, the pace has slowed down compared to the golden period seen after the pandemic, he said. “The market is now maturing and is expected to take some time to settle.”