E-tailers defy diktat, sell refurbished mobiles

Despite the government’s diktat to handset makers to not sell refurbished or used phones, these products have made their way into the online channel.

Several e-commerce players, such as Amazon, Overcart and eBay, are openly selling used or refurbished phones and the category is only growing.

In September this year, the Environment Ministry had issued a show-cause notice to several e-commerce players, including Amazon.in and eBay, for dealing with refurbished and used mobile phones. However, two months since then, it is business as usual for these portals when it comes to selling refurbished phones.

In fact, Amazon.in launched its refurbished category in September this year. It has Apple, Lenovo, Motorola, Samsung, Micromax and OnePlus as the most popular brands.

The phones are available at heavily discounted prices and with a warranty from the seller and not from the companies.

It is also important to mention here that Flipkart, which is an authorised marketplace for Apple, does not deal in used products.

The Centre had this year turned down a proposal by Apple to sell refurbished phones in the country as it would clash with Prime Minister Narendra Modi’s ambitious “Make in India” initiative. Besides, it also would protect the country from being another “dumping ground for e-waste” by cell manufacturers.

Apple, meanwhile, was looking at increasing its sales by selling pre-owned phones in the world’s largest mobile market by providing affordable products. While Apple declined any comment on whether the company was aware about the availability of used phones on e-commerce portals, an industry expert said that Apple deals with certified pre-owned phones, which is different from refurbished as Apple completely changes the old phones and converts them into “almost new” phones with a different IMEI number.

“At present there is no clear regulation saying that selling of refurbished phones is illegal. However, the indication is that the government is completely against this,” said Jayanth Kolla, an IT and telecommunications analyst. He further added that while Apple and other companies would not be dealing with this directly, several third-party vendors and distributors, who have access to markets like China and Taiwan would be importing these devices through the grey market or other channels.

Pankaj Mohindroo, National President of the Indian Cellular Association, told BusinessLine that while this is not a serious issue, the sellers dealing with refurbished phones require surveillance.

Meanwhile, even as the government is yet to come out with clear guidelines with regard to refurbished phones, consumers seem quite happy as they get to use premium products at throw-away prices.

“The refurbished category has witnessed exponential growth. Within 10 months from December 2015, the category has seen 100X growth,” said Nitin Kocchar, V-P at Shopclues. He added that the refurbished mobiles have emerged as a leading category, not just for revenues but also driving positive margins for the category.

On how the marketplaces are selling the refurbished products when they have been termed illegal, ShopClues said the company has been selling them for a year by creating a marketplace for refurbished sellers, who legally buy the used products and refurbish them. “Our unboxed category brands have a brand warranty and refurbished phones have a warranty provided by third-party companies.”

Amazon did not respond to mails sent in this regard.

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