At the end of October, Ebay U.S. announced the implementation of a portal dedicated to refurbished market. This space, entirely dedicated to second-hand products, welcomes only brands respecting the list of criteria set up by Ebay.
The arrival of this new platform is not that surprising. It follows the trend of a consumption mode which is growing in importance year after year.
If this platform is currently only available in the US and Australia, France is not left behind in the refurbished market.
The refurbished smartphones market in France
The French remanufacturing market is driven by one product category: smartphones.
More than 2 million reconditioned smartphones have been sold in 2019 in France. This represents 10% of smartphone sales in the country, a figure that has almost doubled in 2 years.
In 2020 this market already shows a 10% increase in sales turnover. This growth is expected to strengthen: 60% of French people now plan to buy a refurbished device.
But why are reconditioned smartphones so popular? These 3 factors can shed some light on this popularity:
Smartphones are more and more powerful, more and more sophisticated…and more and more expensive! The price of new smartphones has skyrocketed in recent years, pushing consumers to turn to more affordable solutions. Depending on the model, you can see a 20% to 70% drop in the original price for a completely refurbished smartphone.
With a steady pace of new model releases, consumers only have to wait a few months before buying an “almost” state-of-the-art smartphone.
It’s no longer necessary to prove that the production of smartphones is polluting. According to ADEME (the French Environment and Energy Management Agency): “Smartphones have a very heavy impact on the environment: the extraction of minerals, transport, use and end of life are all moments of life that leave a mark on the planet.
In the context of climate crisis, changes in consumption patterns tend to favor the adoption of remanufactured devices. Thus, “27% of the actors put forward their willingness to make a gesture for the planet” explain Kantar.
Refurbished devices are therefore great alternatives for customers wishing to make a responsible purchase.
While the quality of reconditioned smartphones remains a brake in the imagination of some consumers, it is quite different in reality.
A smartphone must pass several rigorous tests before it can be offered for sale as a refurbished device.
During these tests, resellers change certain components if necessary. As a result of this process, refurbished smartphones carry warranties of up to 24 months, just like new products.
Players such as the Backmarket platform ensure that these criteria are respected. BackMarket has set up the “Back Label” for this purpose.
Refurbished market and health crisis
While smartphone manufacturers have started the year very badly due to the health crisis (20% decline in the first quarter of 2020 on average) the reconditioned market is not experiencing the crisis.
The lockdown has forced many consumers to equip themselves with electronic equipment at home, to ensure teleworking. It’s quite natural that, to avoid excessive costs, many have turned to smartphones but also computers, tablets … all refurbished.
However, the reconditioned players had not waited for the health crisis to be interested by professionals. Some resellers had already set up partnerships with companies. They modernize the fleet of smartphones of employees with reconditioned products, without forgetting to recover or buy back the replaced smartphones in order to re-inject them into the circuit. The very definition of a circular economy.
Refurbished market player: BackMarket, a success story made in France
Created in 2014, BackMarket is born in France. In only 6 years of existence, BackMarket has become one of the major players in the refurbished market. Driven by the desire to change the way we consume our electronic devices, BackMarket makes no secret of its ambition.
Back Market recorded a doubling of sales during the first containment period compared to the previous period. Proud of its 1,200 reconditioning partners, the company managed to raise 110 million euros in capital!
This fundraising has a clear objective: conquer the American market, the second largest market for BackMarket today.
“Our vision is that in the near future, refurbished products should become the norm, and the purchase of new products the alternative.”
“When the Americans received a $1,200 bonus to compensate for the drop in their purchasing power, our sales were multiplied by two in the territory,” says Thibaud Hug de Larauze, CEO of BackMarket. He also adds : “Our vision is that in the near future, refurbished products should become the norm, and the purchase of new products the alternative. And if we want to democratize this new way of consuming, it is primarily in the United States that we must succeed in doing so”.
But BackMarket doesn’t stop there. The company’s goal is to become the world leader in this market within two years. To do so, they plan to double their workforce (currently 300 employees).
One last limit to cross
However, there is still one obstacle to the company’s progress: gaining the trust of consumers.
After being singled out by the French magazine “60 million consumers” in 2019, BackMarket is now doing everything possible to prove to its customers the quality of the devices it sells. Indeed, many consumers are still wary of buying a reconditioned electronic device.
In order to reassure and continually improve the quality of their products, the platform rewards merchants with the lowest failure rates, not those who provide the highest volumes. To push them to improve, it provides them with tools, such as suggestions for reliable battery suppliers. “Our goal is to raise the level of quality so that consumers no longer have factual reasons to buy new,” explains Thibaud Hug de Lazaure.
The impact of each of us
While attitudes are changing, there is still one point on which the refurbished market must convince consumers even more: getting them to resell their old smartphones.
This is the limit of a circular economy: it depends on the number of smartphones put back on sale. Too many people continue to keep all their old phones in the bottom drawer. Often to have a second phone when needed.
That would be nearly 90% of our old smartphones remaining unused instead of being put back in the circuit.