The Rise of India’s Second-Hand Smartphone Market

The Indian smartphone market is the second-largest in the world, characterized by the sheer volume of new device shipments. Feature phones still account for about a quarter of sales, but this segment is shrinking. However, total sales only grew by a modest 2% in 2024. With feature phones fading into the background, why isn’t the primary smartphone market booming as expected? The answer lies in the rapid growth of India’s second-hand smartphone market, which is quickly becoming a significant force in reshaping the smartphone landscape.

India has now become the third-largest market for second-hand smartphones globally, trailing behind only China and the US. In 2024, India’s organized secondary smartphone market — including refurbished and devices sold as received — grew by 10%, with 5.7 million devices shipped, far outpacing slower growth in the primary market. Growth is driven by consumers’ desire for low-cost devices, flexible financing options and the appeal of getting more value for money.

The shift highlights a broader trend toward budget-friendly second-hand smartphones appealing to first-time and repeat buyers. The significant price gap between new and second-hand devices is a game-changer for many, with some models costing 50% less when bought second-hand. This price difference makes smartphones accessible to a much wider demographic, including those who can’t afford a brand-new device. Even young consumers, who typically seek premium but affordable smartphones, are turning to the secondary market.

Although 85% of the market remains unorganized, platforms like Flipkart and Cashify are stepping in to formalize the sector, improving the consumer experience and creating new opportunities for buyers and sellers alike. The organized segment remains strong, buoyed by the increasing availability of warranties, improved consumer awareness and financing options similar to those available for new devices. As these factors continue to influence purchase decisions, we believe the organized secondary market is poised for sustained growth.

India’s rise in the second-hand smartphone space can also be attributed to local sourcing of devices, supported by anti-dumping laws that promote a circular economy. Additionally, “buy with exchange” programmes have gained significant traction, with e-commerce giants like Flipkart and Amazon making trade-ins easier and more accessible.

It’s been fascinating to observe how local players are encouraging trade-in activity in India. Cashify, for example, offers innovative services such as “trading in old smartphones for new ones” and “selling old smartphones for cash” through in-store drop-off, doorstep pick-up, and kiosk facilities. The firm has streamlined the trade-in process, making it more convenient than ever for consumers to upgrade or sell their devices. Cashify’s approach has strengthened its brand and India’s position in the global second-hand smartphone market.

In the brand landscape, Xiaomi continues to dominate the overall organized second-hand smartphone market. However, Apple has emerged as a key player in the refurbished segment. The growing demand for premium smartphones at lower prices has allowed Apple to maintain a strong presence. This underscores that India is a critical strategic market for Apple. Second-hand iPhones offer an alternative route for Apple to expand its role in the country, and I’m eager to see how this space continues to evolve.

On the supply side, there’s been a growing focus on sourcing premium models, as these tend to offer a smoother refurbishment process compared with entry-level and mid-range devices. Maintaining a supply of premium devices has become a priority for refurbishing companies, ensuring consumers can access high-quality and reliable smartphones.

Despite the impressive growth in the organized secondary segment, challenges persist. Limited availability of 5G smartphones, manual grading processes, the variety of models to refurbish and the supply of spare parts remain significant hurdles. However, there are signs of improvement. Companies like ControlZ have introduced automation into testing and grading processes. As more players adopt similar technologies, we expect significant advancements in the quality and efficiency of the refurbished device market.

A crucial development to watch is the iPhone 16e, which could shake up the second-hand smartphone market. Offering flagship-level performance at a lower price, the iPhone 16e competes directly with refurbished iPhones, potentially driving down prices for older models and squeezing profit margins in the refurbished sector. That said, a wider range of second-hand models and ultralow-cost options are likely to continue being in demand among consumers who prioritize affordability.

What does this mean for the future? We expect the organized second-hand smartphone market to continue its strong momentum, with a projected compound annual growth rate of 8% from 2024 to 2028. Continued investment in technology, consumer education and trade-in programmes will help the organized secondary market grow substantially. This expansion will unlock new opportunities for brands and consumers, signalling an exciting new chapter for India’s smartphone market.