It may be true that many of the best business ideas emerge during desperate times. Take weFix, which was started in a university dormitory room in 2007 after the iPod of its founder, Alex Fourie, broke.
"I couldn’t find [anyone] to fix it through the traditional channels," he says. "I went online, ordered a part and fixed it myself. Soon friends were asking me to fix theirs — and a business was born."
The business was originally called iFix, as it limited repairs to Apple products, but the company recently changed its name . Its portfolio now includes brands such as Samsung, LG and Huawei.
With the global smartphone market soaring, the astronomical growth of firms like weFix is no surprise, says Fourie.
Today weFix has 30 retail outlets, employs 200 people and has more than 500,000 "happy customers", he says.
"If you consider that most smartphones break at least once in their two-year lifespan, the market [for repairs] is quite big," says Fourie.
Fewer than 5% of weFix clients return with a recurring issue. The most common repair is of a cracked screen.
The cost of repairing a phone at a weFix store starts at R600 and can go up to R4,000. Repairs at some phone manufacturers’ stores start at R400 and can go up to R2,000.
But weFix is able to deliver a one-hour repair turnaround time in many cases. It says 95% of repairs are done on the same day.
Most operators take a week, regardless of the nature of the repair, and this difference sets weFix apart, especially for users who can’t go more than a few hours without their devices.
It is still more cost effective to repair phones at hole-in-the-wall stores that have popped up in most cities and towns. But where those stores are not "accredited", weFix can repair devices for insurance companies.
Even though Fourie’s business had such a small start, he has big ambitions . The company has been approached by potential partners elsewhere in Africa, as well as in other parts of the world, says Fourie.
It has also diversified into the pre-owned cellphone market with the launch of its subsidiary, i2, in 2015. It buys used phones from the US for reselling in SA.
The refurbished cellphone market has grown steadily in recent years and is estimated to be worth R2bn in SA.
A Deloitte report says the global market for used smartphones is worth US$17bn, presenting an opportunity for entrepreneurial companies. About 80m smartphones, to the value of $11bn, were traded in 2015.
Deloitte predicts that at least 10% of premium smartphones (worth $500 or more) purchased new in 2016 will end up having three or more owners before they are retired. And it says those devices will still be used in 2020 or beyond.
The growth rate of the used-smartphone market is forecast to be four or five times higher than that of the overall smartphone market. Deloitte expects the practice of selling pre-used smartphones to accelerate to 2020, as consumers and suppliers increasingly embrace selling smartphones or acquiring second-hand ones.
Nothando Moleketi, COO of ReWare, which also makes pre-owned, high-end smartphones available in SA, says sales of pre-owned phones have taken place informally via online classifieds sites for some time. ReWare was formed last year, and sources its devices from international aggregators. It refurbishes the devices and packages them with new accessories and a one-year warranty, says Moleketi.
The company sells iPhones and Samsung’s Galaxy S range of devices, for which there is a high demand. The company’s devices are available in 42 Edcon stores.
ReWare CEO Felix Martin Aguilar has set a target of 250 outlets through partnerships with other retailers. It may also open its flagship store in future.
"The fact that we have grown from 14 stores early this year to 42 less than a year after launching the company shows that the demand for pre-owned smartphones is high," he says.
He says ReWare is in discussions with cellphone network operators to include ReWare devices in their products to give customers more options. ReWare is also talking to GloCell to introduce packages for users who want a high-end smart device but have less to spend on it. Customers will be able to take up contracts on the refurbished phones. ReWare is targeting value- and cost-conscious consumers who are looking for a specific brand but do not want to buy a new device .
Their customers include those who are "looking for a replacement smartphone after a loss or breakage, or parents looking to purchase the first smartphones for their children and want a leading-brand smartphone, but are not willing to part with a great deal of money", says Moleketi.