Have you ever thought about which life memories make you sound old? My easy one is that I was ten years of age when I first surfed the worldwide web in my dad’s office, and it was only a year after it got introduced, well before going mainstream. I vividly remember the days before that, when my parents had to call travel agencies for plane tickets, mail-in slips of paper for newspaper subscriptions and insurance policies, or put their credit cards in carbon-copy imprinters to pay for bigger purchases. Smaller ones were cash-only, obviously.
Maybe for you, it isn’t the internet, but rather a fashion style or a summer hit song from your early days that now sounds positively retro. However, as technologies and fashion and music trends go, they’re ephemeral and always subject to change, often swaying back to the very thing that wasn’t cool or imaginable only a decade or two earlier.
It is however different for capitalist consumption trends. Ever since industrially produced personal items became affordable in the late nineteenth century, the measure of human well-being, both personally and when looking at entire societies, has been the degree to which people can afford new consumer goods. Whether we talk about clothes, electronics, cars, or furniture, newer was always better, and owning more newer things meant wealth and success.
When I look back at my life so far, I have the feeling that way more than the memories of pre-internet days, this culture of desiring new stuff that I fully grew up in is what will define me as an old man someday, compared to younger folks who grew up very differently.
We have all heard of the various separate trends and buzzwords in this realm. Pre-owned, vintage, and circular economies; they all refer to the growing demand for commercial items that aren’t new. And while economic and regulatory (environmental) motives underlie this growth, we can clearly see that in many verticals an inflection point is being reached, where enough people want to buy things that aren’t new, that it stops being an embarrassing personal circumstance, and becomes a trendy fashion statement instead.
This move, from the dread of second-hand to the lure of pre-owned, is exactly what a couple of Bulgarian managers at one of Europe’s biggest peer-to-peer marketplaces sensed a few years ago. Mihail Dimitrov was leading a business growth team at the marketplace company at the outset of the pandemic, when they ran research and realized that the fastest growing category of items listed for sale by owners was used smartphones, and not just in Bulgaria but across several regional markets. When they took these insights to management, however, they were told it’s interesting for marketing purposes, but given the volume of other businesses, the company doesn’t see reasons to launch a separate product for this vertical.
This is when Mihail, who had in the meantime already validated the growing trend in pre-owned electronics across mature markets, thought to himself; Bingo.
The global market for refurbished and used mobile phones has grown at the rate of 7% over the 2016-2020 period and is projected to increase from US$ 49.9B in 2020 to US$ 143.8B by 2031, expanding at a CAGR of 10.2% during the same period. (Persistence Market Research, 2021)
In early 2021, Mihail pitched the idea to Oggy Popov, a seasoned Bulgarian entrepreneur, who had previously built and sold the largest digital brochure business in the country. Oggy immediately appreciated the opportunity, after which Mihail left his job and the two set out to build Swipe.bg.
Fast-forward another ten months, and after the initial meetings at our Vitosha office, we got excited as well. According to market projections, pre-owned electronics may rise to capture anywhere between a third and a half of the total market in the next decade, and with the team’s prior experience in building and managing online businesses internationally, as well as the progress so far, it looks to us like a potential market leader in a segment that will become quite hot.
I’ve talked about this before, in Vitosha Stories about other companies we invested in: one of the most lucrative things to any early-stage investor is to invest in an able team going after a growing opportunity. In the investor community, we like to call this “A rising tide raises all the boats”. As Europe is undergoing a pivot, both in consumer preferences as well as in regulatory incentivization, towards circular economy solutions, we believe that Swipe.bg, with its partnerships with telecom providers, and thousands of happy customers, might be a big regional player in this up-and-coming sustainability-focused market trend.
So if you’re in Bulgaria, next time you plan to get a new phone, check out online what your old one will fetch, and have a look at the new models available. Chances are you won’t only save 50% or more for the same phone you’d buy new, but you’d also be an early joiner of one of the biggest shifts in capitalism and market economics in well over a century.