2024 China Smartphone Rental Market Status, Industry Chain Structure, Competitive Landscape, and Development Trends [Chart]

December 09, 2024 13:07:45

(1) Analysis of New Smartphone Transaction Models

At the current stage, the number of smartphone users in China has reached saturation, and the upgrade cycle for smartphones is becoming increasingly shorter. Each year, a large number of smartphones are discarded or left idle, leading to the emergence of new smartphone transaction models. Currently, the main models include financial installment plans, second-hand transactions, smartphone recycling, and smartphone rental.

(2) Introduction to the Smartphone Rental Industry

In recent years, the sharing economy has rapidly developed in various fields such as transportation, short-term rentals, and power banks. This trend has encouraged more companies to explore new opportunities, leading to the discovery of the smartphone rental market, which was previously a market gap. However, China's smartphone rental industry is still in its early stages and lags behind other models.

The smartphone rental industry can be categorized as follows:

• By operating system: iOS, Android, etc.
• By device condition: brand-new devices, non-brand-new devices.
• By rental duration: long-term rental, short-term rental.
• By end-of-rental options: device return, lease renewal, buyout.
• By revenue source: rental fees, insurance and maintenance fees, etc.

(3) The Smartphone Rental Industry is in the Growth Stage with Rapidly Increasing Market Demand

New-generation smartphones often come with higher technological advancements and cutting-edge features. As consumers become increasingly dependent on smartphones, they are more willing to choose the latest models. Smartphone rental has become a growing trend. While this model is already mature in foreign markets, it remains an emerging industry in China, still in its growth phase.

In recent years, with the entry of companies like Zhuanzhuan and Lezu, the domestic smartphone rental market has been booming, with market demand growing rapidly. According to statistics, the market size of China's smartphone rental industry reached 20.178 billion yuan in 2022.

From the perspective of market segments, rental fees are the primary source of revenue in China's smartphone rental industry. In 2021, rental income accounted for 19 billion yuan, making up 94.16% of the total revenue, while accidental protection service fees contributed 1.178 billion yuan, accounting for 5.84%

(4) The Smartphone Rental Industry is Influenced by Multiple Pricing Factors, Showing an Overall Upward Trend

The pricing in the smartphone rental industry is influenced by two main factors:

1.New smartphone prices: As the smartphone market slows down in terms of shipments and competition intensifies, smartphone companies are accelerating innovation and product upgrades, leading to rising prices for new models. To maintain profitability, smartphone rental companies have also been raising their rental prices.

2.The development of the recycling system and the increase in smartphone residual value: Technological advancements have significantly impacted the residual value of older models. Although the absolute value of old smartphones has been increasing, the faster product upgrade cycle has widened the gap between the residual value and the original price. This has made some consumers more inclined to choose the more cost-effective option of renting smartphones. To maintain profits, rental companies have gradually raised their prices as well.

In recent years, the overall price in China's smartphone rental market has shown an upward trend. In 2020, the average annual rental price per smartphone was 5,220 yuan, while in 2021, it slightly dropped to 5,000 yuan per year. Among this, the rental fee accounted for 5,310 yuan, and the accidental protection service fee was 310 yuan per year.

(5) Diversified Development

Currently, the future development of the smartphone rental industry is expected to be more diversified. For example, smartphone rental services can be integrated with the hotel industry. Some smartphone rental companies have already started collaborating with local hotels, allowing guests to rent smartphones during their stay for various operations. This not only enhances the customer experience but also increases the service value of the hotel while helping rental companies expand their business.

(6) Increasing Market Concentration

The smartphone rental market is still in its early stages, with an increasing number of competitors entering the industry, leading to intensified market competition. Many rental companies and consumer electronics companies are stepping into the rental market, making the industry increasingly competitive. However, as the market continues to develop, leading companies with larger scale and stronger technical capabilities will expand their market share through mergers and acquisitions, further increasing market concentration.

(7) Enhanced Security

One of the main reasons some consumers are hesitant about smartphone rentals is data security concerns. Most smartphone rental companies currently use factory reset to erase personal data. However, this method is quite basic, as data can still be recovered after a factory reset, posing risks of identity theft, account password leakage, and bank card information exposure. Therefore, smartphone rental companies need more advanced and professional technologies to protect user privacy and data security.