Second-hand becomes first choice
By Wale Arewa, CEO of Xperien
The supply chain challenges of 2020 have caused the global electronics market to decline drastically but has also brought new opportunities for the refurbished market.
These devices have become extremely appealing, especially now that firms professionally refurbish these devices and go to great lengths to reassure their buyers of their quality.
For example, Apple’s iPhone disassembly robot Daisy can efficiently reclaim valuable materials at a rate of 200 iPhones per hour. This is part of the company's drive to stop mining the earth and aims to build all products from recycled materials.
Not only are refurbished electronics cheaper, but consumers are fast realising that refurbished devices are also better for the environment because less waste is being generated. These could include smartphones, computers, laptops, servers and tablets.
These devices are good as new, a team of experts thoroughly check each device and restore it to the best condition possible. Once certified by refurbishing experts, one can normally expect a 30-day money-back guarantee and a one-year warranty.
According to Counterpoint Research, nearly 137-million used smartphones were sold in the US and Europe last year, accounting for about 10% of all smartphone sales.
There are two options: one can either purchase a cheaper new device or a high-end refurbished popular brand like Apple, Samsung or Huawei. These top of the range brands are extremely expensive, but after 12 - 24 months, they are available for up to 70% less.
Sales of used devices could match sales of new devices in the near future because the refurbished electronics industry is gaining credibility with improved quality and service. Consumers remain cautious, because there is still a lot of apprehension about the second-hand market.
Many people prefer a second hand Apple phone or laptop than a new one from an unknown brand. This is largely why Apple dominates the second-hand market - it has brand value and the devices are extremely expensive.
Environmentally-conscious consumers also realise that buying second-hand devices increases the lifespan of devices. This is a big tick for the circular economy, keeping electronics in circulation for as long as possible and eliminating waste.
Why this trend matters to ICT business in Africa
There are couple of reasons why the trend toward refurbished is important: firstly Africa does not have the disposable income of the developed countries and refurbished products can deliver similar functionality required to promote growth. Also, many countries have banned the export of ewaste, so the reusing the equipment in Africa will give us more time to develop improved recycling channels for our own waste.
Many corporate companies are starting to look for sustainable practices. A good starting point is to incrementally to build up appetite and confidence for refurbished products. However, this is made difficult by the fact that they have to find a reliable supplier who can offer them after-sales service and then extend the use of refurbished to all functions that do not require the latest computing power.
There is also conflict between what the consumers require, protecting the environment and the manufacturer desire to keep factories open and provide jobs and profits. Gone are the days when products lasted forever: today manufacturers achieve their revenue objectives and consumerism through psychological and planned obsolescence. An example of psychological obsolescence is the demand created for the new iPhone every 18 months. Product obsolescence is created in the same product by developing software that ruins device's battery.
For now, there are no significant African computer manufacturers, but manufacturers will eventually move towards a more componentised production to ensure that only a part of the product needs to be replaced and a subscription model will evolve to help them to maintain a regular income from their products.