Ireland is making ‘smart consumption choices’ when buying electronics, says Refurbed co-founder Kilian Kaminski.
The AI boom has had several effects; the rise in smartphone prices alone.
Forecasters expect smartphone prices to jump as much as 13pc this year, and manufacturers including Oppo, OnePlus and Vivo are already reporting the first wave of these increases in China. The rest of the world, unfortunately, may not be too far away.
Rising prices caused by AI’s seemingly insatiable demand for memory chips are also expected to cause a sharp drop in global smartphone shipments this year, and according to Counterpoint research, as may the ongoing US-Israeli strikes on Iran. Similar changes are expected to affect other electronic devices that require a chip.
Amidst all this, however, Vienna-based electronics retailer Refurbed is seeing its business grow. The company, which was founded in 2017, recently reported gross merchandise volume (GMV) growth of more than 40pc year-on-year, with sales of more than €3bn since launch.
The company operates in 11 EU countries and has plans to expand to 12 more. Last year, it turned a profit and raised €50m to support that expansion.
Besides phones, the company sells other refurbished gadgets, including computers and kitchen appliances.
Refurbed believes there is a complete shift in consumer behavior toward refurbished properties, and according to founder Kilian Kaminski, that shift is largely a result of the tightening of economic conditions. Environmental concerns play a consistent, but relatively small, role.
“What we see directly [is] if the price difference between new and repaired [goods is] bigger, automatically more buyers buy [refurbished].”
Ireland, in particular, is making the transition to “intelligent consumption choices” in recent times, he says, compared to 2021, when Refurbed launches its services in the country.
In its five years in Ireland, Refurbed has generated almost €146m in GMV, has over 200,000 customers and over 400,000 products sold. A net 17m kg of CO2 equivalent has been saved as a result of this second-hand purchase. Also, more than 50pc of customers have returned, Kaminski said.
Another cheap way
There are several features that work for Refurbed. First, regular price increases in consumer gadgets mean that secondhand use is a cheaper option, regardless of whether the user is environmentally conscious. Secondly, the regular and continuous growth in the market of the first gadgets means that there are parts available for use.
“Most sustainable products are always very expensive”, Kaminski says, pointing to relevant fashion items, for example. But refurbished electronics are cheap. And “you do something good for the environment, and you get the same good product as a new product”, he argues.
The company receives a continuous supply of old devices from companies, parts from which are transferred from one product to another until they return to the circular economy. There are usually only a few parts that need to be replaced to repair a phone though, Kaminski notes.
Also, the latest trade-in program also allows the average consumer to send in some of their old devices. Currently, this makes up a small portion of the devices they use for remodeling, something Kaminski wants to expand.
He says there are around 7.6m unused electrical appliances sitting idle in Irish homes. These are “important dormant resources”, he says, containing gold, silver, copper, lithium, and other precious metals. “We’re just starting now to motivate customers to really think about the value of this device … and bring them back.”
Do you even need a new smartphone?
It’s a fact, not universally acknowledged, that the most sustainable thing you can find is the one you already have (here’s a great site to measure your digital carbon footprint). But why bother looking for something new if the upgrade isn’t what you were hoping for?
For years now, studies have predicted that consumers are putting off smartphone upgrades due to a decline in innovation. Despite this, smartphone shipments have continued to grow over the years, and manufacturers don’t seem to want to slow down in releasing new products.
Kaminski says consumers are “really asking” whether it makes sense for them to upgrade to a new, old model[huge] growth in a revitalized market”.
This is still part of a broader problem that needs to be addressed with better device design and better repair support.
During our interview, Kaminski recalled that even he can’t fix his own things, a hobby he once had as a child. “I couldn’t fix my machine because it’s complicated[ly] built and glued and everything”.
Kaminski is a board member of the European Refurbishment Association, a lobby group representing the EU refurbishment market. Refurbed is also a member of the association.
Together, they’re working to seek regulatory changes to ensure that software updates don’t unnecessarily shorten a smartphone’s lifespan, he says.
In addition, the EU’s so-called “right to repair” aims to ensure that manufacturers provide timely and cost-effective repair services.
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