CCS Insight’s Circular Markets: bringing together the best in the global secondary market

 A strong start: Orange's commitment to sustainability

The event commenced with a keynote address from Philippe Lucas, Executive Vice President of the Device & Partnerships Division at Orange Innovation. He oversees the company’s device portfolio across 27 markets and proudly highlighted Orange's involvement in the upcoming Olympic Games. Notably, 75% of the hardware used at the Olympics will be reused, including 15,000 ruggedized smartphones from the French brand CrossCall.

Lucas emphasized Orange's commitment to extending the longevity of hardware to meet its net-zero carbon goal by 2030. The company is advocating for manufacturers to extend OS upgrades to six years, improve battery quality, enhance repair options, and increase the sale of refurbished devices. Orange aims to have at least 10% of its device sales come from refurbished products. While Orange France has made significant strides in the secondary market, Lucas acknowledged that sustainability efforts vary across the company’s different European operations.

The price-driven nature of the secondary market

The secondary market is highly price-sensitive across both the supply and demand sides. Residual value is a critical factor for any trade-in scheme. According to CCS Insight, 53% of consumers potentially opt for used or refurbished devices primarily due to cost considerations, but only 10% do. What is needed to improve this dramatically?

The global secondary market continues to expand, with considerable differences between mature and emerging markets. Egypt (+16%), Kenya (+14%), and India (+12%) are leading growth areas. The market is highly interconnected, with regions like North America and Asia exporting surplus devices to Europe, the Middle East, Africa, and Latin America. European Union (EU) regulations may play a crucial role in encouraging local trade-in schemes, as restrictions on importing devices could drive up prices.

Increasing trade-ins: challenges and opportunities

The first panel discussion featuring James Murdock (Alchemy), Sandeep Shetty (NorthLadder), Biju Nair (Assurant), and Martin Huegli (Back Market) focused on circular supply chains. Panelists emphasized the need for a commercial model in Europe to boost trade-in rates, which are still much too low. As a currently, nearly 50% of secondary market devices in Europe are currently imported, exposing businesses to supply chain risks.

Key factors influencing trade-in rates include residual value, a seamless trade-in experience, integration into the point-of-sale (POS) process, and consumer awareness. However, the fragmented nature of Europe makes it highly unlikely to match the consumer incentives offered in the US. Manufacturers are becoming more involved, supporting both in-house and third-party trade-in programs. Additionally, embedded diagnostic software is improving the trade-in process. These developments are expected to drive higher trade-in volumes across Europe.

Sustainability and profitability go hand in hand

Augustin Becquet (Recommerce), Stefan Nilsson (Foxway), Dominique Rousseau (Vodafone), and Fabian Sempf (Mercantile) discussed the prioritization of sustainability. The consensus was that sustainability must align with commercial benefits. If refurbished products fail to generate a margin, they will not be sold through retail channels.

To achieve sustainability, businesses must adhere to the three R's: repair first, reuse second, and recycle last. Engaging with EU policymakers is essential to ensure that regulations support the refurbished and used device market. Policies such as the right to repair and eco-design initiatives could be beneficial. However, uncertainty surrounding the implementation of USB-C standards and inconsistent CE enforcement across EU member states pose challenges to growth.

Google's commitment to extending device lifespan

CCS Insight's Aretha Thompson interviewed Jon French and Rachel Steinberg, both from Google. Google is genuinely committed to sustainability and actively supports the secondary market. This is also because consumers using a pre-owned or refurbished Android device will engage with Google services. By experiencing the Android operating system and its benefits, they are more likely to remain within the ecosystem, bringing continued advantages to Google.

The discussion covered key strategies for increasing the residual value of Android smartphones, including extending OS upgrades and allowing older devices, N-2, to access advanced features like Gemini AI. The introduction of trade-in modes in Android 16, along with diagnostic tools for battery and storage health, will streamline the processing of used devices. Additionally, new software tools will help address modem portability issues by indicating where specific Android devices can be used.

Scaling circularity through automation

One of the most anticipated panel discussions focused on industrializing and scaling circularity. Panelists included Fergal Donovan (Cyculus), Josh Matthews (Apkudo), Itzik Chayun (Get-re), and Reynold Simonnet (Dipli). They emphasized that the essential elements of automated processing and grading in a fully controlled dot-to-dot environment are scalability, speed, and precision, ensuring consistency and transparency. Processing speed is critical, as device values typically depreciate by 1% per week. Even a price fluctuation of just €2 can significantly impact profitability of each individual device. Ultimately, securing smartphones requires offering the most competitive price in the market.

Retail kiosks that perform automated device grading in-store have proven highly effective, boasting an up to 35% conversion rate. These kiosks, which complete grading and processing within five minutes, integrate logistics, data analytics, and instant payouts.

The panel also compared the US and European secondary markets. The US benefits from strong subsidies, multiple customer touchpoints, and highly developed reverse logistics. In contrast, Europe remains fragmented, complicating trade-in processes. Panelists highlighted that accurate grading increases device value, with upstream and downstream grading differing significantly. Ultimately, automated grading leads to higher resale prices.

Understanding end-user motivations

The final panel discussion brought together Kilian Kaminsky (Refurbed), Anne-Catherine Pechinot (Easy Cash), Kevin Teoh (Kingfisher), and Lou Tricarico (Macquarie) to explore consumer behavior in the secondary market. CCS Insight's research confirms that price, sometimes even negotiated in store, remains the primary factor driving both purchases and trade-ins. While sustainability is a growing concern, it remains secondary to affordability. Consumers also consider trust, product quality, ease of transaction, and transparency when making decisions.

A potential solution to increase trade-in volumes is the expansion of Device-as-a-Service (DaaS) programs and instant upgrade options. These models allow customers to upgrade whenever they choose, ensuring a steady supply of used devices for resale. However, residual value remains the ultimate determining factor in trade-in and purchasing decisions.

Conclusion: the future of the circular market

CCS Insight's Circular Markets event successfully brought together industry leaders to discuss key challenges and opportunities in the secondary market. The discussions highlighted the importance of sustainability, automation, and trade-in incentives in driving growth.

With strong participation and positive feedback, it is evident that Circular Markets has the potential to become a landmark annual event in the industry. As the secondary market continues to evolve, collaboration between businesses, regulators, and technology providers will be crucial in shaping its future.