Cellucity CEO Sean Joffe said Samsung’s competitors in South Africa will have to respond to the electronics giant’s aggressive smartphone trade-in promotion. launched with the Galaxy S22 series.
“OEMs like Oppo, Xiaomi, Huawei will have to formulate a swap response to stay relevant at the high end of the market, because that landscape has now changed forever,” Joffe told MyBroadband.
When upgrading your smartphone, trading in your old device is an effective way to make expensive new phones affordable.
Trade-in deals are now common practice among cell phone retailers in South Africa.
However, Joffe explained that wasn’t always the case.
“It took Cellucity almost three years to gain significant traction with the exchanges,” he said.
“But as trade-in values for these devices have increased alongside new product launches with increased support from OEMs, adoption rates have increased dramatically,”
The time it took for trading to become more mainstream was due to the belief that South Africa was a second-hand market.
Joffe said that view well and truly ended with the recent Samsung Galaxy S22 trade-in campaign, which saw almost twice as much engagement as the Galaxy S21.
Samsung’s campaign lets you trade in some previous generation flagship smartphones and get R10,000 off the price of a Galaxy S22 smartphone.
Cellucity is partnering with Samsung for the campaign.
“When planning the program, we knew there would be growth in trade-in clients and expected it to be around 120%. We weren’t expecting 3,200%! Samsung South Africa’s director of integrated mobility, Justin Hume, told MyBroadband.
Everyshop is also one of the retailers that capitalizes on exchanges and has found great success with the service.
“Trading is a priority as part of our overall strategy. Not only does this give consumers a more affordable price on new devices, but it encourages a responsible way to get rid of old technology,” Stef Michael, Marketing Director of Everyshop, told MyBroadband.
While phone swaps have become a big part of regular business for new phone launches, it raises the question of what happens to old phones.
Old phones are categorized and then distributed according to their model and quality after being traded in.
“As a rule, Class A devices can be resold in South Africa. However, Class A devices represent a very small proportion of the overall volume. The rest will be sent overseas where it will be sorted and repackaged for sale in other markets,” Joffe said.
This practice has proven so successful that Everyshop has extended trade-ins to products other than smartphones as well.
“Across our business, we have expanded trade-ins beyond just cellular and now also include laptops and other select technology. We work with a variety of partners to recycle, resell or donate products after trade-in,” said Michael.
Exchanges offer an efficient way to safely dispose of old technology, offering substantial discounts to consumers and ensuring the market will not run out of low-end phones.
It’s no surprise that it’s become an important part of the market, Joffe said.