Imported used laptop sales pick up steam

Global chip shortage, coupled with persisting supply chain interruptions, high duties, USD shortage, and Taka devaluation, has turned laptops into expensive equipment. This has made imported used laptops a viable option for local consumers, especially students and freelancers.

It should be noted that the imposition of 15 per cent VAT on imported laptops, along with other taxes, has exacerbated the situation, making new laptops increasingly unaffordable for a good segment of consumers.

Amidst these challenges, concerns about black market influx and VAT exemptions have been raised by industry experts and traders, urging government intervention to alleviate the financial burden on consumers.

Even five years ago, laptops were not considered that essential. But the scenario changed during the Covid-19 pandemic, as there was a high demand for such computers due to online classes, exams, and home offices.

Laptops have since then won over mainstream IT consumers. Their prices however have soared in recent years. To resolve this issue, businesses and traders have found an affordable solution – used laptops that come from different countries such as Dubai, UAE, Japan, and South Korea.

After visiting Dhaka’s biggest computer markets Agargaon’s IDB Bhaban and Elephant road’s Multiplan Center, The Business Post found specific shops that sell pre-owned laptops, tablets, phones, and computers of different renowned brands.

They have different categories for such products – such as brand new without box, two months used, six months used, and a year used. Prices will differ based on how much time a laptop has been used.

Some shops provide a 60-day replacement guarantee, a 15-day parts replacement guarantee, and a five-year service warranty. The prices start from Tk 25,500. The sellers titled those “open-box” laptops. They provide only the original charger and laptop itself without any box.

A used laptop seller at the Multiplan Center said, “Now-a-days, new laptops have become very expensive. Two years ago, the starting price of a laptop was Tk 20,000, but now it has doubled to Tk 40,000, which is quite high for many people.

“We strive to make laptops accessible to everyone. So, people are increasingly opting for used laptops to obtain quality devices at a more affordable price. We source used laptops from various Middle Eastern countries, ensuring both quality and affordability. Additionally, we offer a 15-day parts replacement guarantee, and a five-year service warranty.”

In search of budget-friendly laptops, average consumers are increasingly leaning towards these reconditioned laptops.

Atik Hasan, a private sector employee visiting Multiplan Center to buy a laptop, said, “I am looking for a budget friendly laptop, but the price is pretty high. So I am searching for a used one.

“One of my friends told me that the used laptops are being imported from Dubai, which is both affordable and good quality. I am planning to buy one of those for my office work.”

VAT putting extra pressure

The government did not exempt 15 per cent VAT on imported laptops in the FY23 budget, in a bid to support local manufacturers. Additionally, a 20 per cent duty hike and 15 per cent VAT on operating systems and database software contributes to higher prices of laptops.

Industry insiders say due to the imposition of new tax, the total duty applicable on the import of laptop computers stands at 31 per cent.

This has severely hit consumers belonging to the middle class segment, students and the freelancing community, who have already been struggling with runaway inflation that has been rising due to escalated global commodity prices.

Bangladesh Computer Samity President Subrata Sarkar said, “Laptops sales in Bangladesh are expected to reach 500,000 units by 2024. HP, Asus, Dell, Lenovo and Acer are the top-selling brands. The total laptop market size in our country is around Tk 10,000 crore.

“The industry demands exemption of the 15 per cent VAT currently imposed on laptops and printers. We have been demanding this facility since last year when this VAT was imposed. The upcoming budget should reflect this change.”

 “VAT has been withdrawn at the retail level, and this facility should continue as well.”

He then pointed out, “Because of high duties, laptop prices have increased by about 10 per cent – 15 per cent. Besides, there is pressure on USD. We are also having problems with opening LCs.

“As a result, everyone including students, freelancers, and corporations are facing losses. The government's goodwill is needed to resolve this particular issue.”

A flourishing black market

Sellers say the impact of high duty and VAT rate has led to a flourishing black market for laptops.

Ahmed Hasan, managing director of Ryans IT Ltd, pointed out that the total amount of duty and VAT have reached almost 35 per cent – 40 per cent.

He added, “The reason why the government has imposed this VAT is not being fulfilled. Because of this black market, products are entering the country anyways.

“Besides, this flow of used laptops has increased through alternative channels, which is legally prohibited in Bangladesh. The price of used laptops is less than 50 per cent of brand new ones. As a result, many people are buying used laptops instead of new products.”

Laptops are the initial investment for freelancers in Bangladesh. The affordability of laptops is a significant factor in a freelancer’s ability to start and sustain their profession.

Bangladesh Freelancer Development Society Chairman Tanjiba Rahman said, “There are 10.5 lakh active freelancers in Bangladesh. A laptop is the initial investment of those who do freelancing.

“If a person gets a good laptop at a lower price, they will be more willing to do freelancing.”