We Need to Talk (more) about Cashify

I recently read a report highlighting Cashify's impressive growth trajectory in 2023.

Founded in 2009, Cashify lets customers sell and buy refurbished electronic devices, mostly mobile phones and laptops. Apart from buying directly from users, the company works with several offline and online channels and brands such as Xiaomi, OnePlus and Samsung for their exchange programs.

The report highlights a 25% growth in Cashify's buyback business and an astonishing 444% increase in revenue from the refurbished segment in the calendar year 2023. Fun fact, Apple phones were most sought after. Apple held over 50 per cent of the refurbished smartphone market share, with Xiaomi, OnePlus, Samsung, and Oppo trailing behind.

This model has not only proven profitable but also scalable. With rising prices of smartphones and electronics and growing e-waste, this company seems well-poised for solving a big problem and capitalising on the opportunity. And yet, it deserves more publicity. Talk of over- delivery and under promise.

Took me back to the classic lemons problem we studied in our microeconomics class. The lemons problem, introduced by economist George Akerlof in his 1970 paper "The Market for Lemons," illustrates how asymmetric information can lead to market failure. In markets like used cars, sellers know more about the product's quality than buyers. This disparity causes buyers to offer only an average price, which drives high-quality cars (peaches) out of the market, leaving predominantly low-quality cars (lemons). As a result, overall market quality declines, and transactions may cease entirely due to mistrust and uncertainty about product quality.

Cashify takes on this problem and protects customers from adverse selection by buying devices, refurbishing them and now selling directly to consumer. And, this is a very difficult thing to do because you’re managing three different operations. But think about the natural extension to even other categories - Luxury bags and watches, furniture, art and so on. And further down the value chain too, into a market that OLX and the like haven't successfully cracked yet.

This is definitely one company to watch out for.

Reference:

1. Cashify white paper

2. Cashify Whitepaper 2024 Summary