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Why Hong Kong is a Key Refurbished Phones Market

Statrys Team
Published: 06 Aug 2021

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    In both developed and developing regions, e-waste is on the rise.

    Technology like smartphones is often dumped when they start to slow down, quit working, or even when a new version becomes available.

    In efforts to drive sustainability, the refurbished phone market is growing. 

    A refurbished phone is taken back by the manufacturer for minor defects or some other reason and then made new for resale at a much lower price.

    Refurbished phones are phones that are unsellable in the “new” marketplace.

    Rather than dumping them, they are sold under the “refurbished” label.

    They may also be gently used phones considered “out of date” (a year old) that are then cleaned up for the marketplace. 

    Many people (especially in developed countries) have traditionally categorized refurbished phones as “used” and avoided purchasing them.

    Most are ignorant of the rigorous quality check processes that are run on these phones.

    However, with sustainability practices on the rise, there has been a simultaneous increase in refurbished phone sales around the world. 

    The Hong Kong Connection

    Hong Kong residents are extremely tech-savvy.

    They demand the newest mobile devices and tend to upgrade their devices yearly.

    The large flux of discarded, barely used phones is funneled through legitimate channels to vendors all over the globe. 

    Large wholesalers have created an extensive buyback network with several large carriers T-Mobile, AT&T, in addition to European and US recyclers.

    One of the biggest of these wholesalers is Guang Yi Co. Ltd., which specializes in electronic products and turns over around $200 million USD per year.

    Guang Yi and other traders like them have monopolized the refurbished phone business. 

    There are around 10,000 factories located in Hong Kong that help to recycle the phones.

    The smartphone is opened, cleaned, and any necessary repairs are made.

    They are then repackaged with accessories and the user’s manual in a box that is almost indistinguishable from a brand new phone. 

    Why Do Consumers Prefer Refurbished Phones From Hong Kong?

    First and foremost, Hong Kong has an excellent grip on the market.

    A huge financial center that continues to grow economically, an enormous amount of refurbished phones flow through their bidding market.

    In fact, around 80% of second-hand iPhones travel through Hong Kong and are sold through auctions to Asian, European, and US buyers. 

    They also apply a rigorous grading process to their merchandise.

    The phones that are refurbished and packaged are practically indistinguishable from a new product.

    They’re boxed with manual, accessories, and earbuds, and are held to a strict resale standard.

    Any product that is indicated as “A” in the grading process is assured to look almost new and is in full working condition.

    Hong Kong is also a world business power.

    With a stable banking system, superior logistics, and a wide network, it just makes sense that any large-scale business would thrive.

    There is also a simple custom clearance process, tax-free trading. 

    How Does the Hong Kong Phone Trade Work? 

    The big Hong Kong traders work essentially as sales agents.

    They receive the phones through recycling programs or from partnerships with phone corporations (Apple, for one example).

    They sell batches of these refurbished phones to the highest bidder. 

    Prospective buyers examine the batches and then offer a price.

    When they get their hands on the merchandise, the electronics are sent to warehouses for minor repairs and clean-up.

    They are then sold to buyers in China, and other markets.

    Huaqiangbei has one of the largest markets for used iPhones and laptops.

    In fact, because of the amount of merchandise, it handles it has become almost another production base for Apple smartphones. 

    Is It Legal?

    The short answer is yes and no.

    Like all businesses, there is a legitimate side and an illegitimate side.

    Apple, AT&T, T-Mobile, and others are involved in the refurbished phone trade.

    The benefits include a strong vision of sustainability practice, as well as the true benefits of this sustainability.

    Plus, they can be a part of an extremely lucrative trade. 

    Middlemen in the process can stand to coin money, as well.

    The markups offer a fat margin while still maintaining good savings for the consumer.

    And Hong Kong has a very generous custom clearance and an excellent network of legitimate buyers and sellers.

    However, just like any business, there is the possibility of bad agents who sail into more illegal waters.

    Just be careful who you deal with. 

    The Refurbished Phone Trade Takeaway

    Hong Kong is an epicenter of many kinds of business, a true financial world power.

    In drawing the refurbished phone trade, it’s meeting a lot of needs and (of course) benefiting the profit margins of businesses large and small. 

    Many phones that would otherwise be discarded through the fast-fashion mindset of modern electronics are given a second life.

    Factory models rejected for minor, and not close to problematic, defects are likewise saved.

    The amount of electronic waste globally is a huge issue, and any initiatives to staunch the flow and encourage recycling of these products are extremely welcome on an international scale. 

    In refurbishing these phones, not only are ecological metrics being addressed, but also economical ones.

    Many developing countries are overflowing with consumers who are desperate for the latest tech but can’t afford to pay the price for a new factory model. 

    The refurbished phone market, while not entirely philanthropic, helps to meet this need.

    As the tech world advances, many people can be left behind.

    Making an affordable option available to the masses is a net positive for innovation and equity. 

    Businesses working in the sprawling epicenter of Hong Kong have seen these needs, and with the superior logistics that this metropolis offers, have created a system to meet them.

    With the large tech companies backing the play, Hong Kong stands to be the epicenter of the refurbished phone trade for years to come.

    Owning a refurbished phone business means dealing and shipping to clients worldwide.

    You're gonna need a business account that helps you navigate all those currencies, payment types, foreign exchange trades.

    Open a business account with Statrys today, and you'll get a multi-currency account in less than 48 hours.

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    Statrys Limited is licensed as a Money Service Operator (No. 19-02-02726) in Hong Kong. Statrys UK Limited is a Small Payment Institution (FRM: 911226) registered with the Financial Conduct Authority in the United Kingdom. Statrys UK Limited (FRM: 902805) is a registered agent of PayrNet Limited (FRM:900594), an Electronic Money Institution authorised by the Financial Conduct Authority in the United Kingdom under the Electronic Money Regulations 2011 for the issuing of electronic money. Trade financing services are offered by our partner, Velotrade Management Limited, regulated by the Securities and Futures Commission of Hong Kong (CE Ref #BJL007)