Buyer’s guide. The gray market for electronics. A thrifty purchase or a bunch of problems?

Hey.

The topic of the gray market has somehow been forgotten over the past decade, has disappeared from heated discussions, and the novelty has disappeared. Buyers roughly understand what a gray device is, and it can be a TV or telephone, small electronics. Typically, a gray product is associated with a low cost, less expensive than retail, which sells officially delivered devices. Someone, through thoughtlessness, draws the image of Robin Hoods, who are not engaged in business at all, but made the need to bring flagships in suitcases to Russia to Russia in order to sell them at a more affordable price. And, of course, these Robin Hoods don’t want to cash in like the big and greedy retailers do. Surprisingly, even today, when discussing the gray market, one has to face stereotypes that arise from a complete misunderstanding of how the price of a product is formed, what the buyer gets and what he does not get. The last thing here is perhaps the main thing.

In the 2013s, the problem of the gray market was acute, sales of gray phones accounted for about half of the total sales in Russia. And now it’s time to understand what a gray phone is and how it can be described. On the market, it is customary to call gray equipment that is supplied bypassing the manufacturer’s representative office (as an option, an official distributor in the absence of a representative office), and such equipment was not originally intended for Russia. For example, within the framework of the law, you can buy the same iPad tablets somewhere in America, import them into Russia, pay taxes and sell them at retail. At one of the moments of acute confrontation with the Apple representative office, this was done in Svyaznoy. The delivery set did not include a charger for Russia; an adapter was reported in retail in order to comply with Russian law. In XNUMX, it was an example of a demarche against the Apple dealership that quickly ended. Buyers were outraged that they paid comparable to official deliveries for something that should have cost less.

Since then, the existing loophole has been closed; the customs check the list of authorized partners for each manufacturer. For example, if I want to buy a smart home from Xiaomi and bring it to Russia, then, if I am not on the list, I will not be able to carry out customs clearance, the goods will hang at customs. The solution is to change the name for this product to something else, which instantly translates history into the field of contraband, incorrect filling of customs documents. This is what a huge number of servo carriers are doing, since the benefit on products from Xiaomi, coupled with the deficit, negates their risks.

One of the conditions for the existence of the gray market is the difference in prices around the world. For example, a smart bracelet in China can cost half as much as in Russia. And if you bring such a bracelet to us, then it can be put on sale at a price 30-40% lower, plus you will have a tangible profit, which is much higher if you trade bracelets from official delivery. And do not forget that you also get a cost advantage, customers immediately see your value proposition.

The size of the gray market today fluctuates a lot depending on the type of device, but there is a general rule. The smaller the size of the product, the easier it is for it to enter the market. The explanation is that many bring gray equipment to Russia in suitcases, this is the easiest way. Someone uses pilots for this, enterprising people on a smaller scale ask tourists or travelers for this. Even in the midst of a pandemic, when passenger traffic actually stopped, this channel continues to work more or less regularly and bring money to all participants in the scheme. Airlines are trying to fight this, conducting raids in which they confiscate found electronics, fire those caught on such cargo transportation. Aeroflot even limited the number of pieces of luggage for the crew in order to reduce the possibilities for carrying one or another equipment. But demand creates supply.

Let’s take a look at the electronics market and try to estimate how much gray sales are occupied by certain products. TVs? Large, bulky goods that are difficult to smuggle through customs, but for expensive models they still manage to do this. The largest estimates say that the volume of such a market is about 5%, but it is hard to believe in this, I think that this market is at most equal to one percent. Memory cards, SSD-drives – on the contrary, an example of an ideal product for the gray market. Compact size, one suitcase will fit hundreds of thousands of dollars worth of goods, the profit will be prohibitively high. Hence the percentage of the gray market, which tends to 40% of sales in different seasons. Smartphones were once also popular, but today in the gray market they are represented primarily by expensive models, flagships. The market for gray smartphones does not exceed 5%, while the dominant position is occupied not by Apple or Samsung, but by Xiaomi products. In the last year, the volume of the gray market for Xiaomi has decreased, as the company began to fight this phenomenon at the level of China, but earlier they simply turned a blind eye to such things, not realizing how this affects the perception of the brand.

I often come across articles with loud, catchy headlines: “The cost of the Galaxy S20 has fallen by 25% in six months.” I went in to see where the fireballs came from, and, for sure, I stumble upon a gray apparatus with an unclear origin. As for me, you need to compare like with like, prices in official channels with those, but not with gray devices. And the reason is trivial, these devices are not the same, no matter how sellers try to prove the opposite to us.

Is the gray device identical to the official one in every way? Or not?

One of the myths that are cultivated by sellers of seryak is that their product is no different from what you find on the shelves of large stores. And if so, why pay more to these “greedy” guys?

A great way to look at offers on the gray market is Yandex.Market, there are many servo carriers on this site, and there are also official suppliers. Let’s take a look at the cost of the Galaxy S20 in the gray market.

Buyer's guide. The gray market for electronics. A thrifty purchase or a bunch of problems?

The minimum cost is about 50 thousand rubles for gray devices, let’s take a look at what the price looks like for the official models. In branded retail, this device costs 69 rubles, but there are always discounts.

Buyer's guide. The gray market for electronics. A thrifty purchase or a bunch of problems?

The cost of 59 rubles in most stores gives us a 990% price difference with the gray market. A palpable difference, isn’t it? Many people argue that if the products are equal, it is worth buying on the gray market, since the savings will be tangible. And for some it makes sense, especially if you understand what exactly you are buying, you can check the product and be sure that you have not been deceived.

The first danger when buying a gray product is that they will try to deceive you, one way or another. There is no Robin Hood, people are trying to do business and make money, so when you are looking for a low cost product, they are looking for the maximum profit and opportunity to sell it.

For iPhones of previous generations, there is a frequent story when, under the guise of new devices, refurbished models are sold, they have a new case and a certain history that stretches behind them. Finding out that you bought such a refurbished machine is usually difficult, it seems that everything is in order. Usually sellers of this junk find thrifty buyers on message boards: “I am selling iPhone X new, in unopened packaging. I bought it as a gift, it was not useful. ” I called the indicated number and asked if it was possible to check the device. “Yes, you can open the package and check everything, turn it on and, if you want, even start customizing. – Are there two such phones? – You are welcome!”. It turns out that you can buy two or three pieces without any preliminary agreements, these are models that are available and sell well.

For the iPhone, there is also a well-developed history of stolen smartphones from operators. As a rule, such models come from America, they can even be activated, but after a month they are blocked and you cannot use them. You find out about this one fine morning and start looking for a way to get your device back. They can’t help you with Apple support, since you bought this device from your hands and do not have any documents for it.

I will not tire of repeating a common truth: when buying gray equipment from your hands, you are rapidly destroying even the slightest chance of getting at least something from the seller if you have any problems. It’s basically a lottery where you give money to strangers and sincerely hope you’re lucky. I have repeatedly seen people who bought refurbished devices (and this is not only iPhones!), And then complained that they had problems with the screen, with its color reproduction. Finding out the details showed that they just had a Chinese matrix, and the donor, apparently, was smashed into trash.

Another thing is when a company sells a gray product to you, you have a purchase receipt and even some kind of warranty. According to Russian laws, you cannot be sold equipment without a one-year warranty, so any breakdown during this time must be serviced at a service center. But unlike official retail, servo carriers do not have access to authorized service centers, they are serviced in basements, where every repair is a lottery. The qualification of the repairers leaves much to be desired, but almost always a device defect is recognized as a breakdown through your fault. This is how this business works, no free repairs, since it is not profitable. In all cases, the replacement of certain parts is not for new components (there is no access to them), but for analogues of Chinese companies or parts taken from donor devices. The quality of such a repaired device can be anything, but the likelihood that you will run into problems is high.

The lack of a normal, transparent guarantee is a big disadvantage for the buyer. Any problem, and you are left alone with it. Official SPs for a large manufacturer are usually scattered throughout the country and are more or less able to solve emerging problems. They often solve them at their own expense. When buying a gray device, if you have not checked it thoroughly, missed something, this is already your headache. If you have problems in the first year, then this is also your pain. You can contact the service, but there will be no sense from this, the business process itself is such that no one will serve you for free.

Fans of gray devices turn into their antagonists at the moment when something breaks with them and they encounter unauthorized services. Lost days, nerves and unclear results. The most persistent go to the principle and begin to sue the seller (if he still exists by that time, usually such companies are one-day, live for some time, and then they are closed). A lot of fun for your money, otherwise you can’t say.

It is also important that you cannot buy additional VIP-insurance for the gray device, when, having broken the screen, you will receive its replacement for little money. I have met servo carriers that sell such a service, but, of course, there is no question of replacing the screen. It’s just money that you give to these people and increase their profits.

An important factor is the fact that when buying a gray phone, you always have to give its full value, no modern financial instruments are provided here. You cannot take advantage of the interest-free installment plan, as it is not available. There is no trade-in as such. For servo carriers, any such tool is a point of vulnerability, since it is a long-term relationship. Their approach is simple – sell quickly, change the name and look for customers again.

We figured out that the gray product does not have warranty support, and this is a tangible part of the cost for any device, regardless of whether you use this opportunity or not. Some time ago, Apple offered a worldwide guarantee, you could bring an iPhone or MacBook you bought in the USA to a Moscow service and get a free repair. It is very expensive, and all companies today are saving on this, so this program is gradually disappearing, for example, Chinese iPhones are repaired only in China, European and American devices are often not accepted for repair in Russia.

But in addition to the guarantee, there are other qualities of the product that distinguish it for a particular market. It is possible to survive the absence of instructions in Russian; after all, few people read these booklets. But, for example, for smartphones, we are faced with the fact that the set of software and capabilities may differ. And also with the fact that manufacturers may block certain functions, for example, Samsung Pay may not work in Samsung, since the region of use differs.

It’s good to look at the example of smart TVs, in which manufacturers block all smart functions in regions where the sale of such models is not foreseen. This outrages buyers who tried to save money, but these are their risks when choosing gray equipment, their savings, which came out sideways.

Buyer's guide. The gray market for electronics. A thrifty purchase or a bunch of problems?

The last thing I would like to say about “identical” devices is the example of Xiaomi, when factories in different countries produce the same smartphones, but use components of different levels. One and the same device, released in China and India, can be as different as heaven and earth. On paper, they are the same, in fact the Indian model is noticeably cheaper, and this cheapness stems from the quality of the device.

Exotic models – no discounts, high prices

It would be wrong to say that the gray market is always prices that differ for the better from official deliveries. There are many devices on the gray market that are not officially supplied to Russia, but there is a certain demand for them. For example, Microsoft does not supply Surface devices to Russia, this is exotic for our market.

There are people who travel and can buy such models in America or in other countries, they realize that this is exotic and they will not receive any guarantee. But they don’t really need it, they buy a special device. Yes, for example, the same Surface Duo, which is extremely unusual in appearance.

Buyer's guide. The gray market for electronics. A thrifty purchase or a bunch of problems?

The cost of Surface Duo in the US is $ 1 plus state taxes, in Russia it is sold for 400 rubles, that is, at the cost of the Galaxy Z Fold180, which in all respects wins and looks different. But this is exotic, and there is a small group of those who want to buy a similar device.

Many people buy the same Chinese iPhones for the fact that they have support for two physical SIM-cards, this is a difference that is striking. This year, American iPhones 12 support mmWave for 5G, which is not very important in Russia, but for someone it may become a matter of principle (those dozens of people who work at an enterprise where such a 5G network is deployed).

Exotic is very different in the gray market in that it is a completely different type of product. Such devices are not officially presented, so they are bought. Usually this is a small segment of the market, designed for fans of the unusual. If a product becomes super popular, then it is launched in Russia quickly enough to avoid that very gray market.

Short conclusions

The market is a great thing; it puts everything in its place. To say that gray goods are cheaper because someone lacks greed is to illustrate a lack of understanding of how the market works. You will not be able to find most of the same smartphones of the middle and initial segments on sale in the gray market, their local prices are so effective that there is no point in bringing such a product and taking risks. The risk for serum carriers is justified on an expensive product, where their efficiency is maximum.

It is gratifying that the price of a product has long ceased to be a determining factor, people often choose a product as a complex service (trade-in, installment plan, discounts and accumulation of bonuses, trust in the seller). The gray market is important in order to create a small and unobtrusive alternative to official sales. For example, in Samsung smartphones, the share of gray sales in Russia ranges from 1 to 1.5 percent. Which is quite a bit, and if you believe the battles of Snapdragon against Exynos, then the choice of the first chipsets should be a priority, but the statistics stubbornly prove the opposite and that it does not matter for 99.9% of buyers. It doesn’t matter at all. The share of iPhone sales in the gray market was once high, up to 20% at its peak. Today it is extremely low, it is about 5-6% in 2019, in the first half of 2020 – about 4.5% (suitcase deliveries have decreased). The leader here is still Xiaomi, although a year ago the share of the gray market was 50% of total sales, today it is about 20%. Against the backdrop of a shortage, regional networks are eating up everything, including gray phones. They are often sold at retail under the guise of official ones.

Each of us can choose the product that suits him, both in price and in other characteristics. It is important to understand the difference between gray and white goods, to be aware of what you are getting and what you are not getting. Your choice should be free from stereotypes and conscious. The gray market is not a Russian invention, it exists in all countries of the world, without exception, its sizes differ. The rule of thumb is that buying a gray product is profitable when the cost differs by 30% from the official price. With a difference of 15-20%, buyers more often choose the officially delivered product, since the differences are no longer so great, but there are more pluses.

In Russia, outside the usual periods on a market with stable prices, one can distinguish moments when certain retail players launch attractions of unprecedented generosity, discounts are such that official goods become more affordable than those on the gray market. And if it is not important for you to buy a product here and now, then it would be reasonable to wait for such a period and “catch” the desired product at the correct cost. In my opinion, this is the most reasonable behavior in our time.

Tell us about your attitude to the gray market, your strategy as a buyer. Look at prices in the gray market or not, are you buying goods? If so, which ones and why? Thank.

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