By Princewill Ekwujuru

Fairly used phones are locked in fierce battle for patronage with new phones in the market occasioned by economic contraction, which has depleted consumers spending power.

File photo: refurbished phones

The other factors responsible for the patronage are heavily discounted price and belief in the durability of fairly used phones. Others are  consumers’ knack for obtaining high–end phones that perform the function of new high-end devices for low price.

Another factor is the trade-in of used phones with monetary addition for new phones, which is later resold to fairly used phone market.

The fairly used phone market has also been booming due to the volume of imported fairly used phones from different parts of the world, especially, United States of America, United Kingdom and China.

In 2016, the fairly used phone market was said to be worth $17billion with 50 percent growth year-on  year (YoY), in units according to a survey by Deloitte, a consulting firm.

The market was also predicted to grow four to five times faster than the overall new phones market.

The survey predicted further that in 2016 consumers sold or traded approximately 120 million used phones at an average value of $140 (N42,000)  per device, a marked increase from the 80 million fairly used phones traded in 2015 worth $11billion, an average value of $135, (N27, 000).

It also predicted that the practice of selling fairly used phones will rise further by 2020 as both consumers and suppliers increasingly embrace the practice of selling or acquiring fairly used phones.

Vanguard  Companies and Markets (C&M)  findings show that  in many developed markets the options  for selling a device is steadily growing, ranging from companies specializing in acquiring second-hand devices  to manufacturers offering leasing options

This, C&M discovered is partly responsible for the growth of the fairly used phones market in Nigeria, with increased shipments to the country.

Though C&M could not get data on the size of shipment to Nigeria, noticeable traces in the open and online stores show that there is a boom in the fairly used phone market in Nigeria.

C&M  investigation shows that a total of 1.7 billion new phones were sold in 2017, which is a 13percent increase from the previous year. Fairly used phones represented an increasing share of the market with about seven percent of the total phone sales by units in 2016, up from five percent in 2015 and four percent in 2014.

Today in Nigeria, the price of fairly used phones has dropped drastically due to influx of used phones, thereby resulting to low price compared to 2016.

C&M  noted that the boom in fairly used phone market has prompted a fight back by new phone manufacturers, coming up with low end phones to counter the low price of fairly used phones.

Consumers speak

A side store seller of fairly used phones who simply gave his name as Ugochukwu at Otigba market Ikeja, Lagos said:   “You cannot buy a new phone for N80,000 for example, when your children have not eaten or not paid their school fees and I will go to buy a phone of that amount, I can make do with a phone of the same capacity and design for as low as N25, 000 to N35,000.”

Martins Njoku, a fairly used phone seller also in Computer village, Ikeja   said: “Some fairly used phones are as good as new phones. The only difference is that it has been used by somebody, for some consumers it does not mean anything to them. The important thing is that the used phone is giving them value. Also the economic down turn is also responsible for the patronage.”

Izuchukwu   Uzah, a   fairly used phone distributor in the same market stated:   “There is battle for dominance in this market, walk around you will find that the second hand phones   (fairly used) are doing well, low price is the major reason used phones are selling well, though there are people who will not go for used phones, but how many are these people.? You can see why the market will continue to grow not until the economy improves.”

Emeks Brothers, a new phone seller also in Computer village, Ikeja said: “The phone market is big enough for everybody; new phones are doing well as well as the used phones market. If I am not selling I would have closed shop, but the fact is that we are all selling. For me I do not see the used phone market overtaking the new phone market. I would not subscribe to buying used phones, because some may have been stolen, and you may be in trouble when you buy such.”

Expert speaks

A market analyst, Maxwell Ibe of Market Analytics, Lagos, said: “At least 11 percent of premium new phones purchase in 2017 will end up having three or more owners before being retired, and will still be used actively in 2020 and beyond.”

In addition, he stated: “For consumers, the primary incentives to sell a device rather than keeping it as a spare, giving it to a family member or throwing it away will likely be driven by the ease of doing so. We expect trade-in value per device to vary by model and market across fairly used phones this year, we estimate that the average value per device will be about N500 to N6,000 for high-end non tested fairly used phones and between N10,000 to N25,000 for tested high-end fairly used phones.

“About half of these devices are expected to be traded in to manufacturers or carriers in exchange for a new phone. The remainder will likely be sold online privately, to retail shops or to fairly used specialists. We expect the practice of selling fairly used phones to rise as both consumers and suppliers increasingly embrace the practice of selling or acquiring fairly used phones.”