Sahil Qureshi operates out of a hole-in-the-wall shop amid bakeries and pharmacies in Santacruz, a western suburb of Mumbai. The 20-something is a self-taught expert in solving software-related glitches in Android phones. “Every day, I get between seven and eight calls for repairs,” Qureshi said, referring to the customers who reach him either through a Google search or by word-of-mouth recommendations.
Saturdays are typically his busiest days as people can mostly afford to not use their phone over the weekend. Qureshi charges roughly between Rs1,500 ($23) and Rs5,000— “almost half” of what getting a device repaired at an official service centre would cost, he claims.
For years, the likes of Qureshi—inside malls, neighbourhood markets, and at street corners—have been the first port of call for Indians despairing over their malfunctioning mobile phones, even though there are no fixed prices, timelines, or even assured quality of service. But that may be changing now.
Last month, Flipkart acquired mobile repair chain F1 Info Solutions, marking the entry of deep pockets into a market that’s often been all about jugaad —low-cost workarounds. The five-year-old company has a network of 158 centres in 135 Indian cities, and 1,000 workers, potentially providing the e-commerce giant with an opportunity to standardise the repairs ecosystem.
Earlier this month, on-demand mobile repair and refurbishment startup Yaantra (formerly Gadgetwood) raised $3.1 million from Carpediem Capital and Duane Park, nearly a year after the same investors poured $6 million into the company.
It’s not that formal repair channels don’t exist. The likes of Xiaomi and One Plus have begun running official repair centres in the country, but their presence is few and far between. And while startups are now standardising the mobile phone repair ecosystem by launching citywide operations, they lack scale. Flipkart, which just raised a whopping $1.4 billion to become the world’s third-most funded private company, can perhaps bridge that gap.
“Maintaining extensive after-sales networks in India, especially ones that penetrate tier 2 and tier 3 cities, is always challenging for smaller and new smartphone vendors,” Rushabh Doshi, an analyst at Canalys, a Singapore-based market research firm, told Quartz. “With an ‘e-service’ (online after-sales service network), backed by a reputable online retailer like Flipkart, smartphone vendors will (now) find it easier to enter one of the largest smartphone markets in the world.”
This means Flipkart’s role will no longer be limited to just selling phones.
The key is pricing. Often, repairing a phone can be as expensive as buying a new phone—especially the cheaper brands. In such cases, “consumers would rather sell their old phones on OLX,” said Qureshi, referring to the online platform to sell used goods.
Besides, with new handset models entering the market almost every month or even fortnight, repairs have taken a backseat. The new models, often driven by consumer aspirations, are also mostly accompanied by deep discounts, staggered payment options, and buyback schemes, Shubham Anand of RedSeer, a Bengaluru-based management consultancy firm, told Quartz. In any case, customers in tier 1 and tier 2 cities anticipate replacing their phones within 17 months of purchase, compared with over 20 months with their earlier devices, according to a RedSeer survey done earlier this year.
Meanwhile, the silver lining for phone repair players is the dramatic rise in the second-hand phone market.
Companies with strong repair capabilities stand to benefit as their know-how can be applied to refurbish handsets, experts said. In fact, they can even buy dysfunctional devices from customers looking to change their handsets, revamp them, and sell them. This creates an additional revenue stream without adding any huge costs.
In 2016, the used mobile phone market in India was worth $3.5 billion, according to RedSeer. It already comprised 20% of overall sales by volume in the world’s second-largest smartphone market, and the share is “growing fast… creating a large opportunity for the repair (and) refurbished (market) players,” the research firm told Quartz.
Yaantra is already in the business. Bengaluru-based Flipkart’s acquisition of F1 Info Solutions comes shortly after the e-tailer decided to join the fray in November. The network of repair centres that come with the F1 deal can potentially cover Flipkart’s damage from a high rate of handset returns, experts told Quartz. The company itself did not respond to Quartz’s request for comments.
It’s a win-win for mobile phone owners, too. Buyers “unable to afford high-quality smartphones…will be able to afford the second-hand version of the same,” said RedSeer’s Anand.