Counterpoint: trade in bonus works as China secondary market shown grows as never before.

China’s secondary smartphone market, which includes both refurbished and ‘as is’ devices, now accounts for 20% of the country’s total smartphone industry, according to research from Counterpoint. The secondary smartphone market in China has seen a significant surge in 5G volumes, growing by 98% year-over-year in 2024. This shift underscores the increasing demand for newer technology in the secondary market as consumers seek cost-effective ways to access high-speed connectivity. The Chinese government’s recent subsidy scheme, which offers discounts on new smartphones when trading in old ones, has increased bulk supply in the secondary market. However, the influx mainly affects entry-to-mid-tier smartphones, while high-end models remain scarce.

Organized sector strengthens while exports widen

China's organized secondary smartphone market is thriving, with key players efficiently sourcing devices and leveraging Hong Kong as a major transit hub for international exports. While sourcing remains relatively concentrated, export destinations have broadened, strengthening China’s position in the global trade network.

Unorganized sector faces intense competition

Since 2023, competition in China’s unorganized secondary smartphone sector has intensified. A shortage of newer A-grade models, particularly Apple iPhones, has led to an increased demand for older models. This trend has driven down average selling prices (ASPs) in 2024.

Apple iPhone dominance faces new challenges

Apple remains the leading brand in China’s secondary smartphone market. However, a leading retailer notes that due to perceived limited upgrades in newer Apple iPhone models, more consumers are considering switching to domestic brands when purchasing refurbished devices.

Refurbished smartphones gain wider acceptance

Refurbished smartphone volumes have historically had minimal impact on new sales. However, in 2024, this effect has become more pronounced. Changing market dynamics, reduced stigma, and a weaker economic environment are driving more consumers towards refurbished options.

Trade-in program drives sales growth

Initially focused on automobiles and home appliances, the trade-in program now encompasses smartphones, tablets, and smartwatches. By encouraging upgrades, the government aims to stimulate the electronics market and overall economic growth. Chinese smartphone manufacturers, with a range of models within the subsidy’s price bracket, are set to gain market share. Apple’s premium models, however, remain ineligible, potentially impacting its position in China’s competitive smartphone landscape.