Huge potential for pre-owned phones market, says Flip Phone
Flip Phone, an e-commerce platform for pre-owned phones, says the demand for pre-owned phones in SA is soaring, as consumers increasingly opt to buy refurbished phones to save money.
Conor Copas, co-founder of Flip Phone, says the rate at which the cellphone manufacturers are releasing new models compared to a few years back, coupled with the weakening rand/dollar exchange rate, resulted in new tech being astronomically priced. This has led to many local consumers who are unable to afford the latest new devices to look to lower cost or refurbished phones.
Launched in 2018, the pre-owned phones online marketplace allows customers to sell their used or new cellphones, as well as buy a certified pre-owned phone.
According to Copas, the company has witnessed significant growth since inception, with thousands of phones bought and sold in the first year of operation, which has set the trajectory for aggressive growth targets in future.
“There is huge growth potential in this untapped market, with a significant focus on sustainability and being eco-friendly, which is a grey area in the industry.
“With roughly 13 million new smartphones sold in SA in 2019 and a 7% yearly growth trajectory, the growth rate of pre-owned cellphone sales is estimated to be four to five times higher than that of the new cellphone market,” says Copas.
The global market for used smartphones is forecast to grow to 332.9 million units with a market value of $67 billion in 2023, according to an IDC report.
The price difference between used products and new products is a critical factor for the growth of this phone segment. Beyond the price factor, customers can pay a once-off price and avoid being locked into a 24-month payment contract, according to Copas, who has worked for local e-commerce platforms Groupon, Hyperli and Faithful-to-Nature.
Flip Phone targets a broad market in SA, made up of mostly Apple and Samsung users, who contribute to roughly 61% of total mobile sales, adds Copas.
The online store is stock-dependent, but currently has most of the popular high-end models in stock.
Its main competitors in the local market are existing established chains, including iStore, Cash Crusaders and Cash Converters, as well as traditional brick-and-mortar stores with an online presence.
However, Copas points out that the majority of these outlets require customers to trade-in or upgrade instead of giving them hard cash, or do not offer lower price points.
“We see more consumers recouping costs on their older models or simply trading in their upgrade device and making use of the previous model for an extended period of time. When it comes to selling your phone today, there are tons of trust issues with third-party Web sites or social media platforms. In SA especially, consumers look for transparent, trustworthy and hassle-free experiences.”
Describing the local e-commerce landscape, he points out it is “somewhat” unique compared to the rest of Africa and the world.
“We see Internet penetration rising through the ease of cellphones, and access to WiFi more readily available. With the steep pricing of new tech, the second-hand phone market was relatively untouched when we started the business. However, in terms of security, transparency and being ethical, the Internet is still seen as a grey area.”
To sell their phone on the site, customers click the 'Sell My Phone' tab, and fill in their phone details. They will receive an instant quote which will be e-mailed to them.
They then follow the prompts on the screen to arrange a convenient collection date. On the day of collection, the seller gets paid once inspections on the phone have been conducted.