What future awaits trade-in, subscription and used smartphones

Due to the departure of a number of electronics brands from the Russian market, including Apple and Samsung, the average price for these devices increased from 10% to 30%. However, Russians did not abandon their usual vendors and began to extend the life of their gadgets, as well as more often use trade-in services and purchase used (used) devices. Retailers, in turn, began offering smartphone subscription services. What exactly are the pros and cons of each of these options and what the future holds for trade-in, subscription and used, Kommersant figured out.

Over the past few years, the lifespan of smartphones in Russia has increased by one year – to 2.5–3 years, Forbes reported, citing data from market participants. Then experts explained this trend by the departure of many foreign vendors from the Russian market, as well as the lack of technological progress in new smartphone models. A similar trend may be associated with an increase in the cost of consumer electronics by an average of 10–15% in 2023 alone; the cost of Apple products increased by 37% year-on-year (see “Kommersant” dated February 26).

At the same time, the demand for electronics repair in the Russian Federation has increased: in 2023 – by 29% compared to 2022. At the same time, the number of service centers decreased by 4–10% mainly due to the closure of official repair centers of departed vendors (see “Kommersant” dated February 16, 2023). But this is not the only way to save on buying a new gadget, which is actively used in the Russian Federation. Back in mid-2022, retailers reported that smartphone trade-in purchases had doubled year-on-year. Many large electronics networks have also announced the launch of a smartphone subscription program, including MTS and MegaFon. At the same time, operators, marketplaces and electronics brands began selling used devices.

Trade-in programs from vendors or subscriptions to a device are mainly aimed at retaining or luring a user of another brand into their ecosystem, as well as making flagship models available for purchase to a larger number of users who are not ready to take expensive models on credit, explains the head of the Telecom department » diHouse company Andrey Malyutin. According to him, similar sales tools were used by A-brands (high price category) even in pre-pandemic times, which made it possible to maintain high demand for flagships.

Subscribe or give up?

Trade-in programs, which allow the buyer to return an old device and receive a discount on a new one, have been around in Russia for a long time, but each vendor or retailer has different conditions. For example, the M.Video website suggests estimating the cost of an old device using an online calculator. The final amount credited to the purchase of a new device may differ from the values ​​​​from the online calculator, since during the sale, a retailer employee will examine the device for its functionality and physical injuries. Also, the client must take advantage of the discount provided immediately after returning the device to trade-in. You will not be able to accumulate a discount or return several devices at once. The maximum available discount amount at M.Video-Eldorado for a new device reaches 98.5 thousand rubles, noted a representative of the retailer.

At one time, the now bankrupt Svyaznoy offered its clients to hand over several devices at once, and based on the amount of equipment handed over, the buyer could choose a new gadget. However, even now there are places where you can hand over several devices at once under the trade-in program. This service is offered by MTS. However, only smartphones, tablets or smart watches can be returned to the operator for trade-in. The DNS electronics sales network, in addition to smartphones and tablets, accepts TVs, small household appliances, laptops, etc. under this program. However, the discount on a new device will not exceed 10 thousand rubles.

According to MTS, from January to the end of March in their network, the demand for trade-in increased year-on-year by 2.2 times, and for a telephone subscription (the program is called Share It) – by 6 times, in contrast to the previous months of the program .

“You can subscribe to a smartphone by filling out an application on the website. After considering it, you need to pay for the first month of the subscription, and then pick up the smartphone at any of the available stores. After 12 months, the user can exchange the device for a new one, buy it back, continue paying for the subscription for another six months, or stop it by returning the smartphone,” explains the operator’s representative.

Mr. Malyutin points out that if you subscribe, the smartphone does not become the property of the user. “He is obliged to return it at the end of the term in a salable form, pay for damage if any occurs, and buy a new phone through a subscription. As a result, the buyer’s total expenses will be much higher than in the case of a direct purchase of a smartphone, even using a loan,” emphasized a representative of the diHouse distributor.

The subscription system allows you to use flagship smartphones on more favorable terms for a certain segment of consumers, with the possibility of purchasing this device, replacing it with another, and so on, says business analyst of the Fplus IT holding Arthur Makhlayuk. “If we talk about trade-in, then this is a profitable program if the phone is in good condition and a relatively new model, but in some cases it is more profitable to sell it yourself and use these funds to buy a new smartphone,” he noted. According to Mr. Makhlayuk’s forecast, the subscription service will continue to develop, but slower than trade-in, since subscription has a number of nuances, such as termination of the contract, fines, etc. In his opinion, the smartphone subscription system may appear in the commercial segment, as well. how if a device is lost, the consumer will lose not personal data, but work data.

According to a representative of M.Video-Eldorado, the increased frequency of device replacement stimulates trade-in programs, which were suspended in previous years due to the official withdrawal of a number of brands from the market. “We expect that the demand for trade-in will increase as the benefits and convenience of returning an old device increase; in addition, the drivers will be the convenience of the procedure and additional sales tools, such as installments,” says a representative of the retailer, adding that in the future in the market, conversion into sales from the trade-in mechanism can increase up to 10%.

The stranger has become our own

The segment of used devices has become one of the growing markets in the Russian Federation. Thus, market participants said that at the end of 2023, the demand for used smartphones increased by 2.5 times compared to 2022. In just one year, about 9 million used devices were sold, mainly from Apple and Samsung (see “Kommersant” dated February 3).

Mr. Malyutin notes that it is difficult to actually estimate the demand and sales of used devices, but judging by the number of smartphone repairs, mainly battery replacements, this market is really growing. “On the other hand, there are currently quite a lot of offers on the market for new smartphones in the range from 10 thousand to 18 thousand rubles. Thus, repairs, leasing, and subscriptions are tools for the most part to increase demand for flagships and expensive models,” he emphasized.

According to MTS, sales of used smartphones in their network continue to grow.

Thus, in the first two and a half months of sales, the demand for used devices on the network increased 2.5 times compared to the same period in 2023; the company does not disclose absolute figures.

“We expect that the demand for these devices will grow primarily due to the expansion of the model range,” noted a representative of the operator.

According to the operator MegaFon, in their network from January to March 2024, the demand for refurbished smartphones increased by 216% in quantitative terms and by 341% in monetary terms compared to the same period last year. The company did not provide absolute figures. “Growing demand stimulates us to develop this area, expand the range and increase the average cost of purchasing devices. We expect that the growth in sales of used smartphones this year in our retail network will exceed 50%,” says a representative of the operator.

A consumer, as a rule, does not want to buy a smartphone that has been used for a year and a half, when you can buy a smartphone that is slightly comparable or slightly weaker in characteristics, but new and with a guarantee, notes Mr. Makhlayuk. Also, according to him, computer literacy among the population has increased and many consumers are beginning to understand that on marketplaces and other platforms they can sell counterfeits or not just used smartphones, but repaired or stolen devices. At the same time, a representative of the IT holding Fplus notes that sales of refurbished iPhones have increased on classifieds, since the products are supported by the vendor longer than Android devices. “Accordingly, from this point of view, the market for used devices will most likely remain approximately the same in the near future, that is, the greatest demand will be for flagships, which thus become more affordable,” he concluded.

Timofey Kornev