Large-format retailers (LFRs) and multi-brand retail outlets strategically rollout exchange offers on mobile handsets to increase footfalls and sales of their products. Under this scheme, customers can exchange their old handsets with a new one, by just paying the difference in amount.
Retailers lure customers to upgrade their phone, giving them better value for their old handsets. The telecom channel partners find such schemes fruitful, as it helps them in generating good revenues. Such phones are again uploaded in the second-hand market, keeping the margins aside. Certain territories, including rural markets of Uttar Pradesh, Bihar and Uttarakhand, have a huge market for the second-hand mobile phones. It’s a win-win situation for both customers and retailers.
The market
Though the second-hand mobile handset market existed since the day handsets industry emerged, but it is only in the recent past that this business has started witnessing a phenomenal rise. Initially, players remained detached from this business, assuming that it might hurt their brand name. But gradually, they accepted it as an alternate way to earn large revenues and increase footfalls.
"The trend of upgrading old handsets rather than discarding them is rapidly increasing. No doubt, today replacements constitute 40 percent of the total handset market," revealed Sanjeev Mahajan of New Delhi-based Hot Spot.
Talking about the USP of such schemes, he shared that such schemes are another touch-point for consumers in their endeavor to build a long-term relationship with customers for any telecom mobility-related need. "Also, it helps in increasing footfalls and building revenues," he added.
Manoj Agarwal, Director, Sweetheart, Kolkata too sees such schemes as an easy way to make money and influence the customer to buy new handsets and/or upgrade them. "Generally, these schemes are not vendor-driven. Rather it is us, the shopkeepers who off-and-on come up with such schemes," he noted.
Seconding the thought, Chennai-based S Peer Mohammed of Kings Park said, "Earlier it used to be only a scheme, but now it has become a necessary entity for any mobile shop. The reason being we can’t say ‘no’ to our costumers when they ask for exchange of a handset," he added.