An Italian company is trying to reinvent offline retail in India for pre-owned smartphones

In January this year, Phonup opened its first store in India — in Gurgaon, a suburb of the national capital. In India, Phonup is a joint venture between the parent company, Phonup Italy, and Francorp, a Franchise India company. Franchise India is one the largest integrated franchise solution companies in the region and holds about 90% of the market share in franchising in India.

Already operational in Italy, Brazil, and England, Phonup aims to be a ‘one-stop-destination’ for all mobile phone problems.

The store offers a wide range of certified pre-owned smartphones from leading brands and world-class repair facilities for a wide range of smartphone and tablets. You can purchase extended warranty plans at an affordable cost and pick up an exclusive Phonup-branded range of affordable accessories, like headphones, chargers, data cables and power banks.

India, one of the largest smartphone market globally, is also witnessing an influx of and a burgeoning demand for pre-owned mobile phones. According to Amarjit Singh Batra, CEO, OLX India, “Mobile phones are the most popular gateway to internet in India, especially for the new-to-net population. With high penetration, and frequent updates, consumers often upgrade to new models within months. This results in good-quality, and fairly new pre-owned phones entering the market within months of their launch.”

OLX is the leading classifieds site in the country and mobile phones is the biggest category on OLX in terms of listings, growing at 45% year-on-year. There has also been an uptake in popularity of ‘recommerce’ platforms like Cashify which focus on the purchase of used smartphones and other electronic gadgets.

According to the OLX-CRUST (Consumer Research on Used-Goods and Selling Trends) Survey for the 2016-17 financial year conducted by market research firm IMRB, OLX registered more than 9.9 million listings of mobile devices in India. In other words, every minute, eighteen mobile devices are listed on OLX.

Yet, even amidst this staggering growth, as per industry estimates, approximately 80% of the pre-owned mobile phone trade is still offline in India. It’s an unorganized sector driven by dealers, retailers, and shop-owners. The repair market for out-of-warranty devices too is similarly disorderly.

And that’s where Phonup aims to bridge the gap. Most second-hand smartphone buyers are wary of the health of the device and absence of reliable warranty and after-sales service, and an organized player could revolutionize the refurbished phone market.

We’ve seen the same in the pre-owned automobiles space where several automobile majors like Mahindra & Mahindra and Maruti Suzuki (with First Choice and True Value respectively) diversified into the business of buying and selling used cars apart from the arrival of new-age exchange services like Cars24.

At Phonup, every pre-owned phone goes through extensive 40+ quality checks before being rolled out to the customers, and each one comes with additional 12 months of warranty. There’s also an associated Phonup Academy trains and certifies technicians who provide repair services.

At the launch, I met Dino Taglianetti, the CEO of Phonup, who was emphasized that Phonup will be a gamechanger in India. “We are here to disrupt the pre-owned phones and mobile repair market in India,” he declared, while introducing me to the spectrum of services like extended warranty packages, accessories, repairs and technical training.

Dino said that the company has been targeting big, emerging economies like Brazil and India which have a large smartphone user base. The scalability required in these markets might be a new challenge for Phonup though. While the company boasts of having stores in three countries, there’s only a total of 13 stores in Italy, Brazil, and England combined (according to the store listing on their official website).

Franchise India’s Amit, who’s the COO of Phonup India, though has the assured confidence of a man who’s been there and done that. With a strong experience in the franchise model, he’s looking to expand Phonup’s footprints in India by opening 50 state-of-the-art stores and partner with 175 select franchisees across the country within 2018.

“In each of the franchises, customers can be assured of the services that Phonup stands for,” he asserts, elucidating on the tough selection process for franchisees even while they are looking at aggressive expansion.

Starting with a franchise model in 2014, in less than three years, Phonup has sold more than 30,000 used smartphones and repaired more than 10,000 devices in the three markets it operates in. India is a much larger market and any business in this domain, if successful, could dwarf these numbers in no time. That’s pretty much what Phonup is aiming for.