Laptop Makers Enter the Refurbished Market Amidst Growing Demand; HP Expands ‘Renew Program’ for Refurbished Computing Products in India
Major laptop manufacturers, including HP and Asus, are venturing into the refurbished space in response to a surge in demand for refurbished IT hardware. With consumer demand for new laptops declining after a pandemic-driven surge, these companies are exploring new avenues to attract customers who seek affordable computing solutions. They are opening dedicated retail stores for refurbished laptops and PCs, as well as partnering with third-party retailers to expand their reach. This initiative is expected to enhance the total addressable market for IT hardware brands at a time when new device shipments have been on the decline in India.
The pandemic-led consumer demand for laptops has dwindled; however, the demand for refurbished IT hardware has surged, and major laptop manufacturers like HP and Asus are revamping their strategies to cater to a broader market.
Recognizing this shift, leading brands are now launching their own retail stores specializing in refurbished laptops and personal computers (PCs) or collaborating with third-party retail partners to reach a wider audience, including those who may not afford brand-new PCs.
Industry insiders and market analysts believe that this initiative will expand the potential customer base for IT hardware brands at a time when shipments have been declining in India due to subdued demand and the fact that the government is encouraging brands to engage in local product assembly.
Arnold Su, Vice President of Consumer and Gaming PCs at Asus, noted the significant demand for refurbished laptops, which surpasses the available supply.
“With the growing number of individuals opting for refurbished laptops in the city, we wanted to create an avenue that offers products that have undergone rigorous checks to ensure access to high-quality laptops and PCs.”
Hence, Asus aims to address this demand by exploring options to refurbish older devices that have seen a few years of use.
As part of its refurbishment model, Asus repairs products returned by customers within a week of purchase due to manufacturing defects, replacing faulty parts, and then offering them through their new retail stores.
Most refurbished laptop buyers have used smartphones or tablets for online classes; over time, their loyalty to a brand grows, increasing the likelihood of purchasing a new laptop later on.
Asus focuses on opening retail stores exclusively selling refurbished laptops and PCs, with an emphasis on offering premium devices at reduced costs. Currently, Asus has opened three such stores in New Delhi, Kolkata, and Mumbai, with a fourth store under construction in Hyderabad.
According to Asus’ Su, premium laptops are being sold at a 20-30% discount compared to their new counterparts and come with a company warranty.
HP ‘Renew’ Programme In India
The second quarter of 2023 witnessed a fourth consecutive quarterly decline of 15.3% YoY, with the consumer segment experiencing a notable 17% YoY drop.
Gurpreet Singh Brar, Vice President of HP India Market, stressed the brand’s commitment to making affordable technology accessible to all, particularly in rural and smaller towns, where PC adoption is limited.
HP, a leader in the laptop and PC segment, recently introduced refurbished laptops in India through certified partners, focusing on selling these budget-friendly products to both retail customers and businesses.
HP is also offering refurbished laptops and PCs on a subscription basis with terms ranging from 6 to 24 months, initially focusing on notebooks and considering expanding into other categories. To further enhance the customer experience, HP ensures comprehensive post-sales support, including warranties.
Bharath Shenoy, Principal Analyst of the PC segment at IDC India, highlighted the latent demand for refurbished laptops and PCs, driven by digitalization trends among small businesses and in the education sector. Hence, Brands are entering the refurbished space with their stores to organize the sector and reach new customers.
HP’s step to expand its ‘Renew’ program in India, which offers a range of refurbished HP computing products with a focus on promoting circularity and sustainability, is an ideal step.
Refurbished electronics are devices previously owned and have undergone inspection, repair, and testing to meet the manufacturer’s standards and performance expectations; they are sold at lower costs than new items, providing a cost-effective option for customers while still offering reliable performance and warranties.
HP recently announced its first PC refurbishment program at the Imagine event in Palo Alto; the program is part of a suite of services referred to as Renew Solutions. It is set to be available in France this year, with plans to expand to other regions in 2024. In India, HP currently offers a rental model with six or 12-month options but intends to broaden its offerings to encompass other aspects of the Renew business model.
Hoffman explained that the Renew Solutions business is divided into three segments: transactional, contractual, and HP-certified.
India will play a part in the transactional and contractual segments’ in the contractual offering; HP will own the device but provide a subscription-based model to customers who need it for a specific period and desire the flexibility to return it at their discretion.
According to Coherent Market Insights, the global refurbished electronics market is projected to be worth $48.29 billion in 2023, with an expected CAGR of 10%, reaching $94.10 billion by 2030.
Hoffman stated that HP is focusing on both large companies and government clients in India and recognizes significant opportunities in the SMB (Small and Medium-sized Business) space. HP plans to invest significantly in India for this project, with the country being one of the top two investment destinations for Renew Solutions in FY24.
The Last Bit,
As shifting consumer preferences and market dynamics change pattern
the decision of laptop manufacturers to enter the refurbished market reflects their adaptability.
With a focus on offering cost-effective options for customers, this strategy is expected to revitalize the IT hardware sector; as they make refurbished laptops more accessible, these companies are targeting new customer segments and helping to meet the latent demand for affordable yet reliable devices.
This move not only benefits consumers but also aligns with the growing global trend toward sustainability and circularity.
