Samsung to sell certified refurbished Galaxy phones in Korea

Samsung Electronics Co. plans to sell certified refurbished Galaxy phones in South Korea at prices up to 50% cheaper than brand-new phones, a move expected to improve the Galaxy phone brand’s reputation amid the growing popularity of its archrival Apple iPhones among younger consumers at home.

“(Samsung) will introduce renewed phones at home,” Samsung Electronics Korea Vice President Kang Bong-gu said during a parliamentary audit hearing session of the Korean Ministry of Science and ICT on Friday.

Kang was respondng to a lawmaker’s suggestion that the Korean smartphone giant sell certified “renewed phones” in Korea to stabilize smartphone prices and improve transparency in the local secondhand phone market.

Renewed phones mean refurbished phones, and this is the first time Samsung Electronics has confirmed the release of certified refurbished Galaxy phones in Korea.

But Kang did not elaborate on when the Korean smartphone giant would start selling officially certified used Galaxy phones at home.

NEW BATTERY, NEW DISPLAY AND 1-YEAR WARRANTY

Samsung Electronics is expected to sell its refurbished phones that are like new through its certified sale networks as in those already sold in the US, France and the UK.

Samsung Electronics currently offers its 100% certified pre-owned Galaxy S22 and S21 series revived with brand new parts, including battery packs, displays and upgraded software, at the Samsung Certified Re-Newed Smartphone online shop in the US.

They are packaged in new boxes with new accessories and priced 15% to 30% cheaper than new phones. Sometimes buyers can get refurbished Galaxy phones at prices up to 50% cheaper during various marketing events. They come with a one-year warranty.

Samsung Electronics operates similar online shops in France and the UK.

With prices for premium phones rising above 2 million won ($1,470), Korean consumers have also been actively seeking used phones.

The Korean pre-owned smartphone market is estimated at about 2 trillion won, with about 10 million secondhand phones changing hands every year.

They are generally traded at local online secondhand marketplaces such as Karrot and Mintit but the quality of pre-owned phones is not guaranteed because they are sold personally through those apps.

Their prices also often fail to reflect the real condition of those phones, increasing distrust among traders.  

This explains the recent high demand for certified refurbished phones in Korea.

Samsung Electronics' certified refurbished Galaxy phone sale is expected to  improve transparency in the Korean secondhand phone market and stabilize used smartphone prices, market experts said.  

TO ENHANCE GALAXY BRAND REPUTATION

The Korean electronics giant is also grappling with the conundrum of pre-owned Galaxy flagship premium phones being sold at cheaper prices than used Apple iPhone rivals, damaging the reputation of the Samsung Galaxy brand.

Apple has been running an official online store for its certified refurbished devices in Korea -- mostly MacBook series, iPads and Apple TV sets. They are about 10% cheaper than new products and come with a one-year warranty.

It also offers refurbished iPhone 12 series at prices about 30% cheaper at an officially certified shop in the US.

If Samsung Electronics sells certified pre-owned Galaxy smartphones like Apple, it is expected to protect its brand’s reputation with a better pricing strategy, according to Korean smartphone industry observers.

Keeping its brand’s reputation high has recently become challenging for Samsung Electronics even at home.  

Samsung Galaxy phones commanded the biggest share of the Korean smartphone market, with 63% as of the fourth quarter of 2022, according to Counterpoint Research. Samsung Electronics was still the world’s top smartphone vendor by volume ahead of Apple as of the second quarter of this year.

But Galaxy phones are rapidly losing ground to the Apple iPhone series among young consumers on its home turf. According to a recent survey, more than half of young Koreans aged between 18 and 29 use iPhones.

Samsung Electronics in June opened its flagship experience store in a posh, trendy area of Seoul's Gangnam neighborhood, about a 10 minutes' walk from Apple’s Gangnam store, to lure Korean young consumers.

Write to Jeong-Soo Hwang at hjs@hankyung.com

Sookyung Seo edited this article.