Ireland is making ‘smarter consumption choices’ when buying electronics, says Refurbed co-founder Kilian Kaminski.
The AI boom has had several consequences; a hike in smartphone prices is one.
Predictions expect smartphone prices to jump by as much as 13pc this year, and manufacturers including Oppo, OnePlus and Vivo are already reporting the first wave of these hikes in China. The rest of the world, unfortunately, might not be too far behind.
Rising prices caused by AI’s seemingly insatiable need for memory chips is also expected to create a sharp fall in global smartphone shipments this year, and according to Counterpoint research, as might the US-Israel ongoing strikes on Iran. Similar changes are expected to affect other chip-needing consumer electronics as well.
Amidst all this, however, Vienna-based refurbished electronics seller Refurbed is seeing its business grow. The 2017-founded company recently reported a gross merchandise volume (GMV) growth of more than 40pc year-on-year, with more than €3bn in cumulative sales since launch.
The company operates in 11 EU countries and has plans to expand into 12 more. Last year, it hit profitability and raised €50m to support that expansion.
Aside from phones, the company sells other refurbished gadgets, including computers and kitchen electronics.
Refurbed believes there is an overall shift in consumer behaviour toward refurbished goods, and according to co-founder Kilian Kaminski, that change is mostly a result of tightening economic conditions. Environmental concerns play a consistent, but minor role, in comparison.
“What we see specifically [is] if the price difference between new and refurbished [goods is] bigger, automatically much more consumers are buying [refurbished].”
Ireland, in particular, is making a shift to “smarter consumption choices” in recent times, he says, compared to 2021, when Refurbed launched its services in the country.
In its five years in Ireland, Refurbed has created around €146m in GMV, with more than 200,000 customers and more than 400,000 products sold. A neat 17m kg of CO2 equivalent has also been saved as a result of these second-hand purchases. Plus, more than 50pc of customers have returned, Kaminski says.
Cheaper alternative
There are a few factors working for Refurbed. One, a general price rise in consumer gadgets means second-hand is effectively the cheaper choice, regardless of whether a user is environmentally conscious. Two, a general and continued growth in the first-hand gadgets market means there’s always parts available to use.
“The majority of sustainable products are always more expensive”, Kaminski says, pointing to fair fashion items, for example. But refurbished electronics are cheaper. Plus “you do something positive for the environment, and you get a similar good product like a new product”, he argues.
The company gets a steady supply of old devices from corporations, parts from which get passed around from product to product until they’re back in the circular economy. There’s generally only a few parts that need to be replaced to refurbish a phone anyway, Kaminski notes.
Plus, a relatively recent trade-in program also allows the general consumer to send in some of their old devices. Currently though, this only makes up a small portion of devices they use for refurbishing, something Kaminski wants to expand.
He says that there’s around 7.6m unused electronic items kept idle in Irish homes. These are “valuable resources which are just lying around”, he says, which contain gold, silver, copper, lithium, and other precious materials. “We just started now to motivate customers of really thinking about the value of this device…and bring them back.”
Do you even need a new smartphone?
It is a truth, not yet universally acknowledged, that the most sustainable item you can get is the one you already have (here’s a nifty site to estimate your digital carbon footprint). But why would you even want something new if the upgrade is not what you hoped for?
For years now, research has speculated that consumers are deferring smartphone upgrades on account of slowed innovation. Despite this, smartphone shipments have continued to grow over the years, and manufacturers don’t seem to want to slow down on releasing newer products.
Kaminski says that consumers are “really questioning” whether it makes sense for them to upgrade to a newer model, which is creating a “[huge] growth into the refurbished market”.
This is still only a part of the wider issue that needs to be supplemented with better device design and better support for repair.
During our conversation, Kaminski recalled how even he is unable to repair his own devices, a hobby he once had as a child. “I couldn’t repair my own device because it’s so complex[ly] designed and glued and everything”.
Kaminski is a board member with the European Refurbishment Association, a lobby group advocating for EU’s refurbished market. Refurbed is also a member of the association.
Together, they are working to demand regulatory changes to ensure software updates don’t unnecessarily reduce a smartphone’s lifespan, he says.
Plus, the EU’s so called “right to repair” aims to ensure that manufacturers provide timely and cost-effective repair services.
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