Inside Asia’s fast-growing market for used and repaired devices
Twenty-two-year-old Lila Srisamut is a university student in Thailand. She is studying to be a school teacher, and, like all teaching undergraduates, she has to complete a term-long practicum at a school that isn’t necessarily of her choosing. In this regard, Lila drew a short straw: late last year, she was posted to a remote school in the provinces, far from both her university dorm and her family home. Not to worry, so long as she is never too far from a secondhand phone shop: this is her lifeline, because without her phone and iPad, she feels helpless. The phone stores, even in remote areas, often offer a remarkable selection of refurbished devices and perform essential repairs on those that are still salvageable.
Lila would be the first to admit that she isn’t the most careful person in the world, but even so, she is not atypical of her generation. Just in the three months since her posting, her iPhone, which she purchased secondhand, has had water damage from being dropped in the bathroom sink, massive trauma from being dropped on the road while she was riding her motorbike, and another bout of trauma from being sat on. That wasn’t the end of her problems, because her iPad, which she considers an essential teaching aid without which she cannot function in the classroom, tumbled out of her bag and into a puddle during heavy rain. She rushed it to the secondhand shop, and the good news is that the problem was fixable. The bad news is that it cost her another 5,900 baht (about US$200) to get the job done. The iPad, which she originally purchased secondhand in a mall in the city, cost only twice that ―12,000 baht.
For Lila and the hundreds of millions of others in Asia who rely on pre-used phones, the costs mount, and the secondhand shop gets so familiar with their faces that they are often on first-name terms. Indeed, there is a plausible argument (though anecdotal and not backed by research) that the very availability of cheap secondhand devices and the ability to repair even heavily damaged ones have made many people around Lila’s age more negligent in their treatment of digital devices.
Estimates of market size and growth rate for secondhand devices vary wildly. It seems like every market research firm in the industry is in for a guess, but no two of the guesses come close to each other. Several of the estimates emanate from market research firms in India, which has one of the largest secondhand device user groups. At the high end of the estimates is Cognitive Market Research (CMR), based in Pune, which reckons the market is already around US$70 billion, with Asia-Pacific accounting for more than half, or approximately US$37 billion. CMR says the largest consumer of secondhand devices in the region is China, accounting for about one-third of the market, followed by Japan and India. Moreover, the growth rate is north of 10 per cent, so by the end of the decade, it is likely to exceed US$60 billion in the APAC region alone. This doesn’t include repairs to phones damaged after purchase, though, which is often part of the service.
The industry is getting a more trustworthy image among consumers with the emergence of branded sales channels and product warranties. Moreover, refurbishment techniques have become more advanced, and AI diagnostic tools have made problem identification easier. These advances are producing more reliable end products and reducing some of the stigma attached to the secondhand industry. Still, many people are understandably wary of hidden defects and avoid secondhand devices for this reason, just as they would avoid buying a used car. Nonetheless, secondhand phone retailers play an essential role in countries like Thailand, where devices are no longer a luxury but a dire necessity and where the cost of a new phone is prohibitive, if not completely out of reach.
This shift also serves as a striking illustration of the circular economy. Although e-commerce sites have become a popular way to buy secondhand devices, there is no substitute for touch and feel and for having a heart-to-heart with the vendor in person. However, there is no census of how many of these small physical shops there are, but they are ubiquitous in Thailand and have entire floors devoted to them in all the country’s shopping malls. Indeed, there are even mall chains dedicated to them, housing dozens of little shops refurbishing, selling, and then re-repairing phones and tablets, often specialising in a single brand. The prices are a fraction of those for a new phone or tablet, but vary substantially depending on the device’s age and condition.
Thailand’s largest mall operator, Central Pattana, typically has an entire floor in each of its centres devoted to IT retail, with secondhand retailers numbering in the dozens comprising a significant part of it. Other mall operators also devote comparable space to the segment. Then there is Tukcom, a chain of four massive vertical malls in major tourist areas that primarily sell and repair used phones and tablets. In the annals of grotesque architectural design, Tukcom’s malls are standouts, and they are extremely scruffy on the inside, too, but most shoppers don’t seem to mind, and the malls have exceptional foot traffic. The rising costs of new devices, constrained incomes in Asia’s developing countries, phone addiction (sadly, an epidemic that no one seems interested in addressing), and the environmental benefits of reuse are fueling the industry’s growth and making it an extremely important tenant for mall operators like Central and Tukcom.
Meanwhile, out in the sticks, Lila has her fingers crossed because she is probably only one mishap away from having to shell out for a new tablet. With no income from her unpaid practicum and reliance on handouts from her loving family to survive, Lila vows to be more careful. But if worst comes to worst, the secondhand store will only be too happy to help, and there will always be one nearby.
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