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E-gadget recommerce becomes circular economy backbone

Shamim Ahmed
11 Mar 2023 00:00:00 | Update: 11 Mar 2023 00:10:29
E-gadget recommerce becomes circular economy backbone

Sanjida, a tech-savvy university student, bought a smartphone online two years ago. She decided to sell it recently after the screen of her Xiaomi Note 5 started giving her some trouble.

She planned to buy a brand new Samsung Galaxy smartphone by adding money to the amount she would get after selling the old one.

But when she went to a retail mobile phone shop, she was disappointed and left confused after the shop owner offered her only Tk 3,500, which is five times less than the amount she paid for her phone.

However, talking to The Business Post, shop owner Mobarak Hossain shared his plight. “We buy second-hand phones to make a profit but it’s tough to determine how much they may cost. Buyers also don’t believe that second-hand phones will be okay to use.

“So we have to buy old gadgets at a much lower price than the original for sure profits. But that doesn’t happen all the time,” he said.

Despite much mismanagement at all retail markets across Bangladesh, the second-hand electronic gadget market is running with great prospects.

Industry insiders said that this market is currently worth around Tk 20,000 crore and recommerce involving these products is increasing threefold every year.

They said that if these products can be systematically reused and resold to the customers, it will change the landscape of the country’s circular economy, save the environment from worsening landfills and bring more people under digital inclusion.

What is recommerce?

Recommerce or reverse commerce is the selling of previously owned, new or used products, mainly electronic devices, through physical or online distribution channels to buyers who repair, if necessary, then reuse, recycle or resell them.

With the widespread adoption of the internet, buying and selling both new and old goods online have become very common nowadays.

Instead of purchasing new goods, re-commence allows shoppers to rent, resell and exchange e-gadgets of idle capacity.

According to a study by Cross-Border Commerce Europe, recommerce marketplaces are growing 20 times faster than the overall retail market.

By 2025, the recommerce market is expected to grow its 10-14 per cent market share to 120 billion euros.

With the number of people in the middle-income group rising and extensive IT adoption continuing, Bangladesh is well positioned to harness the scope of e-gadget recommerce as 93% of consumers say inflation impacts their decision to buy pre-owned items.

Bangladesh and e-gadgets

According to Bangladesh Telecommunication Regulatory Commission (BTRC), currently, there are over 18 crore mobile subscribers in the country.

In 2022, 3.15 crore units of handsets were produced at the country’s manufacturing factories and 3.40 lakh units were imported, which subsequently reached mainly domestic markets, showed BTRC data.

Meanwhile, around 40,000 new computers and laptops enter the market every month, according to Bangladesh Computer Samity.

Bangladesh, one of the world’s top 10 e-scraps-producing countries, generates 3 million metric tonnes of e-waste annually, according to a recent survey conducted by the Bangladesh University of Engineering and Technology (BUET).

The annual growth of e-waste generation is 30 per cent in the country. Mobile and computer PCB-based metal recovery business in the country will be worth around $1 billion by 2030, said the survey.

Inside recommerce

Thanks to people’s second-hand buying and selling habit, the reuse retail sector has prospered over the years with thousands of Facebook groups and pages alongside physical retail shops dealing in these products.

SWAP is the country’s biggest platform that runs businesses online for both new and old gadgets based on the consumer-to-business (C2B) model.

“We mainly deal in electronic gadgets like mobile phones and laptops. At present, monthly, we buy and sell a total of 7,000-8,000 units of second-hand e-gadgets with the average price per unit being Tk 10,000-12,000,” said Parvez Hossain, chief executive officer (CEO) and co-founder of SWAP.

“In Bangladesh, we have electronic products worth around Tk 20,000 crore that can be resold. But most of them are not being resold because people feel disinterested when they think of the hazards or hassle they may face about their selling prices,” he said.

The amount of these types of products will increase day by day, as the recommerce market is expanding three times faster than the traditional e-commerce market globally, Parvez told The Business Post.

If the e-commerce sector is growing by around 10 per cent annually, then the recommerce market growth is over 30 per cent, he added.

“So far, we have only managed to cater to 10-15 per cent of the market. The market is expanding too fast but we expect to catch 50 per cent market share within a few years,” he expressed hope.

Parvez also said that some 100,000 units of electronic products were sold through SWAP in 2022. “We get two types of products. Type one does not need any repairing and we can sell them as they are. Type two needs repairing before we can resell them with various warranties.”

“We had started with 26 people when we launched our platform on February 20, 2020, and now we have 104 people on our team. We have also received around Tk 17 crore in funding so far,” he added.

At present, SWAP has 50 partner shops and 3,000 agent shops where customers can exchange their old products for new products. Later, SWAP collects the old ones from the shops.

Parvez said, “It is not a taboo anymore. People want to sell and buy used gadgets. It’s boosting the circular economy. We aim to bring the people with lower income, who can’t afford to buy new gadgets, into the fold and increase digital connectivity.”

According to SWAP, it has helped reduce 3,650 tonnes of carbon emissions and saved more than 386 tonnes of e-waste through its business.

Meanwhile, Faruk It Solution has been running second-hand laptop retail shops in Mirpur since 2009, with two showrooms operating at the Chowringhee Market alone.

Its Sales Executive Shahidul Islam told The Business Post, “We carry out marketing through Facebook pages and YouTube channels. On average, we sell 350-400 second-hand laptops monthly with the average price per unit being Tk 15,000-20,000.

“In general, we make Tk 2,000-3,000 as profit in every sale.”

He said they collect laptops from across the country through their agent shops at a comparatively cheaper rate. “Then we repair them, if necessary, and resell them accordingly.”

Recycling business huge

Alongside reuse and resell of e-gadgets, the country’s e-waste recycling industry has also become bigger in recent years, with the market seeing 15 per cent annual growth and it’s worth reaching Tk 150 crore, said Azizu Group Chairman Md Abul Kalam Azad.

The country currently exports recycled items to the United States, Japan, Singapore, India and Pakistan.

He told The Business Post, “We collect the unusable mobile handsets and PCBs [printed circuit board] of computer or CRT monitors from hawkers.

“We extract three items — fibre, metal and plastic — from those PCBs. They are later used as raw materials for new or another similar product.”

The e-waste recycling industry is still untapped as only 3 per cent of the total e-waste is recycled, according to the BUET survey.