Fraudsters pose challenge to UAE’s refurbished phones market

An entire sub-industry, built on rampant demand for cheap premium handsets, faces threats from unscrupulous sellers

Tags: Apple IncorporatedHTC CorporationLG ElectronicsSamsung Electronics CompanyUnited Arab Emirates
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Fraudsters pose challenge to UAE’s refurbished phones market Unscrupulous vendors passing off refurbished phones as new represent an existential threat to the UAE industry sub-sector.
By  Baset K Asaba Published  September 17, 2015

Dubai-based Linker General Trading has just offloaded a new shipment of over 4,000 smartphones. The store is teeming with customers anxiously sifting through heaps of second-hand iPhones and Samsung Galaxy S4 smartphones that are part of the latest stock, as more and more customers stream in by the hour.

It is a scene replicated across dozens of stores that dot the narrow arterial lanes of the Deira Central Business district, a reflection of the booming business in refurbished smartphones amid growing demand from price-conscious shoppers. 

While several retailers in Dubai have traditionally offered trade-in services to customers upgrading to higher-end phones, sales for pre-owned smartphones are witnessing unprecedented levels, as traders outdo one another to appeal to evolving customer tastes. Hundreds of thousands of pre-owned smartphones, in various models, are being imported from the US and Europe.

The worldwide market for refurbished smartphones is set to grow to 120m units by 2017, with an equivalent wholesale revenue of around $14bn, according to research firm, Gartner. This is up from 56m units in 2014, with an equivalent wholesale revenue of $7bn.

Linker General Trading imports between 4,000 and 5,000 refurbished smartphones weekly, and most of this stock often runs out in the first two days of delivery, owing to high demand.

"Nearly every month a new smartphone hits the market, prompting customers to trade in their older devices, often still in pristine condition," says Issa Asghar, managing director at Linker General Trading. "The used devices have a high demand among price-conscious consumers who would want to pay less for a premium brand such as iPhone, Samsung, LG or HTC."

His company imports refurbished versions of recent phone models manufactured by Samsung, LG, iPhone, Motorola, Blackberry and HTC. Some of these devices are sold at less than 50% of their original prices.

For example, a refurbished Samsung Galaxy S4 goes for AED430 compared to its launch price of AED2,599 two years ago. An LG G3 goes for AED800 compared to its last year's inaugural price tag of AED2,499, while a Samsung Galaxy Note 4 can go as low as AED1,100, down from its original price of AED2,799 last year.

"We work with various suppliers in USA and Europe who collect phones that suit the tastes of our growing number of customers. Some of them do not come in their original packaging, but they are all tested for defects and most of them are scratch and dent free," says Asghar, whose customers include resellers from other Gulf Countries and Africa.

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