The secondhand smartphone market is booming in Japan as inflation squeezes family budgets and as tourists take advantage of the low prices of devices sold in the country, and this trend is expected to continue.
Japan’s smartphone market is growing about 15% a year, according to MM Research Institute, a Tokyo-based consulting and market research company specializing in information technology and communications.
About 3 million used smartphones are sold every year in Japan, and about 1 in 10 devices being sold in the country is second hand. The total is expected to rise to over 4 million by fiscal 2028.
This comes as phone-makers struggle to maintain sales-growth momentum in the face of peak-phone and feature fatigue, with Japan seen as a key market globally.
“A weakening yen is causing the price of many things to go up. Because the cost of living — water, electricity, gas, food, etc. — is rising, many consumers cannot afford to spend so much money for smartphones,” said Hideaki Yokota, an analyst at MM Research Institute.
Over the past two years, real incomes in Japan have fallen in most months due to the weak economy and the weak currency, and this comes after decades of wage stagnation. With interest rates set to rise and the dollar remaining strong, the outlook for wages remains dim.
Sales of used goods in Japan have grown rapidly as households struggle to make ends meet on salaries that are rising slowly and have been eroded in recent years by inflation.
High-priced phones are no exception. Strapped consumers are finding it hard to justify the purchase of a ¥124,800 iPhone 16, or a Samsung Galaxy S24 selling at about the same price.
Smaller companies in Japan are in the market for used phones as well. They too are being hit hard by the weak yen and the sluggish economy and are looking to cut costs by buying cheaper devices.
The popularity of used phones has been supported by greater access to secondhand models. This development was initially fueled by growth of online shopping during the pandemic, with secondhand offerings among the items being bought heavily by consumers stuck at home.
“An increasing number of secondhand smartphone shops has helped the market to grow too,” Yokota added.
Consumers may be unimpressed by the capabilities of new phones and the new features being offered and might be happy enough with older models. They are put off by the limited performance improvements in new smartphone models, Yokota argues.
International demand for secondhand mobile phones also helps explain rising sales.
Japan is already one of the cheapest countries in the world for buying an iPhone, and with visitor numbers hitting records again, bargain-basement used devices are within easy reach of the tens of millions of tourists coming to the country.
Japan travel influencers have posted videos online singing the praises of secondhand smartphone shops in Tokyo's Akihabara district, saying that the legendary tech zone is a must-visit for tourists.
Given the strong reputation of Japan’s secondhand markets in terms of price and quality, some of the country’s used-product brands have expanded overseas. Chain stores like BookOff and Second Street have opened outlets in Southeast Asia and the U.S.
A number of services have been established up to facilitate overseas transactions for Japanese secondhand shops and auction sites as shoppers endeavor to reach the Japan market and its discount pricing from afar.
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