Asian SMBs to drive refurbished electronics market

As more small and midsize businesses in Asia computerize, refurbished electronics will help lower operational costs yet allow them to leverage IT for growth, says industry watcher.
Written by Kevin Kwang, Contributor

The refurbished electronics market will flourish in Asia, driven by emerging small and midsize businesses (SMBs) that hope to leverage on IT for growth but are conscious about the financial costs of investing in technology, according to an industry insider.

Chris Perrine, chief operating officer and executive vice president of Springboard Research, told ZDNet Asia in an e-mail that even though the refurbished electronics market in the U.S. and Europe are currently more vibrant than Asia's, this will change in the future.

"We believe as the SMB sector continues to computerize, refurbished [electronics] products will provide these companies an easier and more cost-effective way to leverage on IT. As Asia continues to grow, I think you will see the refurbished electronics market grow with it and eventually outgrow those in the U.S. and Europe," he said.

When asked to shed light on how much the global refurbished electronics market is valued at, Perrine declined to comment save to say that the information was "proprietary to clients".

He did add that SMBs have typically been the main customer group for refurbished electronics, either to augment existing IT infrastructures or to invest in technology to cut overall costs.

However, this does not mean large enterprises in Asia are not interested in this market. The executive noted that a majority of organizations in Asia, both SMBs and large enterprises, have purchased some form of refurbished IT equipment in the course of running their businesses.

Meanwhile, other interested parties for pre-owned electronics include buyers who purchase such devices just to extract the component parts and resell them separately, as well as buyers who are interested only in the metals such as gold, copper and aluminum, said Christopher Teo, country manager for IBM's global financing department.

The executive pointed out in his e-mail that Big Blue runs a worldwide broker network to facilitate the sales of refurbished electronics, which is "akin to eBay". Through this network, registered brokers are able to provide consumers with a variety of refurbished equipment and buyback solutions, he added.

"Our access to, and vast experience in, the secondary market means we can help clients sell marketable assets regardless of brands. IBM's role in this refurbished electronics market ensures that clients [are provided with] updated technologies employing environmentally-friendly practices," said Teo.

ZDNet Asia also got in touch with other IT vendors such as Lenovo and Hewlett-Packard to find out more about their efforts in the refurbished electronics market. However, they declined to comment.

Roping in government help
Besides IT vendors and private sector initiatives, Springboard's Perrine urged governments to advance the cause of such refurbished electronics markets by dangling financial sweeteners.

While there are other motivations that will support the refurbishing of pre-owned electronics such as "reducing waste and saving the planet", he said the best initiatives at this point are "always financial"--both in disposing the equipment and advancing the pre-owned devices market.

Perrine went on to suggest that tax breaks for companies which engage in such recycling practices, for example, are one way governments can help provide a boost for the development of such secondary equipment markets.

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