Brightstar to resell, insure, finance refurbished phones
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Softbank-promoted Brightstar Corp. plans to introduce end-to-end solutions for device protection, insurance, buyback and trade-in of mobile devices—a business model that it has successfully tried out in countries such as Malaysia and Brazil.
The company also plans to resell those devices in India or export them to countries that allow the import of used devices, Deval Parikh, chief executive, Brightstar India, said.
These services will be introduced in India in the next six months. Brightstar will also partner with a non-banking financial company (NBFC) or a bank to insure and finance these devices.
“If you want to have a new iPhone, should you have financing? You may say you don’t. But people in the low income need financing, then they will get financing. If you want to insure the device... (you will get insurance). So, those kinds of things we can give in one shot instead of you going to four different places in getting it,” Parikh said.
To be sure, the refurbished mobile market still remains highly fragmented, unorganized and, to a great extent, a grey area. People typically sell their phones on websites such as OLX or Quikr, or at local stores. In several cases, people pass on their old phones to their family members or friends or they keep them as a spare.
According to Tarun Pathak, associate director at Counterpoint Research, as much as 118 million smartphones were sold in India in 2016.
“We are seeing close to 7-8% is refurbished. It is not a big category but it is definitely growing. As you see the number of smartphone users increase in India, the market for refurbished phones will also increase,” Pathak said. “If you look at the margins, they are higher than what you get by selling a new phone, and that is the reason what makes this business even more lucrative.”
Brightstar may just focus on the top-end brands, Pathak said.
“We want to be respectful of how the Indian market operates. There is not a design of how the Indian market operates. There are certain nuances—such as certain devices come back in the market quickly and some do not as people hold back on those devices for longer. We want to understand this a little and are confident we have the capability to do that,” he added.
Brightstar has a similar business in Brazil, which recorded an around $100 million turnover in about three years. The move to finance, insure and resell was triggered by a ban on import of devices in Brazil, like in India, and high import duties as well.
“In future, we will do it in Indonesia and many Latin American countries,” Parikh added.
Parikh said if there is a device worth Rs50,000 and if a customer can bring back that device in working condition after a year, Brightstar will give Rs20,000 for it.
“That’s the promise made upfront. We will be the first one to do that India,” he said.
“Brightstar touches 100 million devices a year in one shape or form. So, we have significant global expertise in new as well as used devices. So, we can resell those devices. And if we insure those devices, we will have a little bit of knowledge about those devices,” he added.