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Sustainability unwrapped a conversation podcast about responsibility, ethics, inequalities,

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climate change and other challenges of our times where science needs practise to think about was and how to make our society more sustainable.

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One podcast at a time. Hi, everyone.

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We welcome our listeners to another podcast episodes of Sustainability Unwrapped made by Honkin School of Economics.

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And my name is on that. If you followed our podcast for a while, you may remember previous episodes that I hosted.

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It's about reuse and recycling of textiles,

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but today we're going to shift the topic kilobits where you've got to still talk about reuse and recycling.

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But in spotlight, we have electronic devices, so in particular our smartphones and the refurbishing process.

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In this episode, I'm really happy to share a microphone with Felipa,

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an expert in this area, from swapping a Finnish smartphone and refurbishing company.

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So welcome Philippa to harm can studio. Hi, and thank you for having me.

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It's great to have you here, especially in such a foggy and rainy morning in Helsinki.

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So I'm so curious about topic, so I'd like you to start with questions right away if that's fine.

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Of course. Great. OK, so I've got an impression that these days people change their phones quite fast because,

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you know, there are so many new models like new updates coming out.

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And so it means that these devices simply don't reach the very end of their lifecycle when they are dying out and you can't use that phone anymore.

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And I really wonder if this is true, that people change the phones often and what happens afterwards to these devices?

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Yes, that is true. Actually, smartphones on this multilevel communication devices produce some sort of like 4.7 million tonnes of e-waste annually.

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And however, these trends are changing. Consumers now tend to keep the phones for a bit longer or the devices on an average.

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People upgrade their phones in two years. But this is like also something that is changing due to the lack of innovation, higher prices, et cetera.

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Mm. I see, I see. So you said two years and the trend is that the consumers actually tend to keep the devices for longer.

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Well, two years still sounds really short for me because like two years and you're getting your phone.

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So it seems that anyway, the growing e-waste problem is still here. Yeah, you are right.

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They waste is the fastest-growing waste stream globally. OK.

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What we can read from the Global Waste Monitor E-waste Monitor in 2020 was that in

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2019 there was like a record of over 50 million metric tons of e-waste produced.

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And the problem with all this is that about only 17 percent is officially reported.

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17 percent. Oh, I see. So what do we know about recycling opportunities in that case?

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Recycling and refurbishing and reusing the used devices is the most effective action we

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can do to to reduce the environmental footprint when it comes to electronic devices.

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Mm-Hmm. Mm-Hmm. I see. Well, recycling and reusing are the terms that are familiar to our listeners from previous episodes about textile.

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And to be honest, refurbishing is something very new for me as well, because this concept what exactly it means in practise,

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that's still a bit of a question because it's also so tied into electronic devices and the electronic industry itself.

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So maybe you could quite clarify for us what exactly refurbishing means and would be great to have some practical examples as well,

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so we could get a deeper understanding of what it means. So a refurbished device is a device that has some malfunction.

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It can be like a broken screen, like a bad battery, like it doesn't charge anymore.

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Speakers on sound. Something like this or a refurbished device means that you take this device change

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or repair the broken parts like the parts that are not functioning as they should,

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and you just make it work as a new one. Basically, refurbished devices work exactly as well as a new one.

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It's like somebody has a new one.

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OK, that's really interesting because I thought that there might be some differences in quality, but maybe later we can have a discussion around that.

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But what are you just explaining about the refurbishing process? Sounds me very like what Swappa is doing, right?

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So maybe you could tell us a bit more about the business side of my face or how

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it is connected to refurbishing and the kind of give us a context in a way.

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Yes, exactly. That's what the business model of Swabi is.

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We sell refurbished iPhone devices. We we basically take all the old models of iPhone devices or use devices.

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We refurbish them and we sell them to content consumers through the website.

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What we do in the company, we refurbish, reuse and recycle devices.

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And we our mission is to to change the behaviour of of the consumer to make it to more sustainable.

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And and the end goal is to make devices mainstream across across all the markets.

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What a wonderful mission. Yes, I see.

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And well, maybe a bit of a personal question, but I'm always curious to hear the stories of people working for sustainable companies.

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How did you? On your way to the industry and to your company, that's a very good question.

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I since I was like a little kid, I was always interested in some small electronics, OK?

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And after I after I was graduated from from the university,

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I started working for a Finnish company that was focussed on on refurbishing the spare parts and components for mobile devices.

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So that led me into different projects, and I was also back in Spain doing my my own business, my own group.

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Well, what I was like refurbishing also screens for mobile devices, selling those to distributors and repair centres and for different reasons.

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I ended up again coming back to Finland and the opportunity to swap came up.

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And I think it was like the perfect match for me because it combines all the all the knowledge and experience that I have.

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Exactly. And the business model of shopping was exactly what I was looking for, and I think it was like the perfect match for for me.

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Exactly. It sounds like that. That's a great story. I like that you had it since your childhood, you know, childhood dreams coming true.

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So now we have a bit more understanding of what Swappa is doing,

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and I really want to dive in into the value identification process sorting and also talk about the consumer perspective.

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And I think consumer perspective, something that is really interesting because it touch all of us.

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We are all consumers of electronic devices. And of course, when I was preparing for this episode,

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I kind of reflected upon my own consumption of electronic devices and the thought of selling my old beloved iPhone 5s.

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But then I had so much good memories and also data pictures, messages stored on that phone,

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and it made me feel so attached so I couldn't just give it that phone away.

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And of course, I thought that the value of the phone is also so low, so kind of to end the story.

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I didn't sell the phone. It's still laying on the shelf is no use.

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And I really one day like for your business how difficult it is to get all devices back from the end consumers.

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Yeah, exactly. Your case is a very common case.

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Often consumers are not aware of of the value of their own device.

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Also, they don't know what to do with them and where to bring those devices. Mm-Hmm.

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There's also like big differences from country to country,

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like some countries are more developed in terms of selling the old devices or like trading the old devices,

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retailers or cut mobile carriers are more prepared for that.

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So depending on the countries, there are more advertisements. People are more aware of all these opportunities.

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And then that's that's what really makes a difference.

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And I hope you also get a more proactive consumers than I do. Yeah, exactly right.

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Yeah. Because yeah, exactly. There's one one concept so-called hybrid nation,

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which is means like what you just explained that devices consumers keep the devices after they're there, they're in life and it's often in the shelf.

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The phone still has, like some some life to to give to other consumer bodies, just like staying there and not doing anything exactly somewhere.

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Well, that's actually what it a cute way to call it hibernation. And then for last two years, my phone been hibernating on myself.

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Yeah, so well for consumers like I am,

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what could be the incentives to kind of dust off the phone on the shelf and bring them to swap for use and refurbishing?

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So the incentive for for consumers are often you can get some extra cash or vouchers to use for it for other electronics.

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In the case of swapping, you can you can sell the your old device, get some cash and then use it when you buy the new one when you upgrade the device.

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Also, depending on on where you sell the device, for example, if you go to a retailer or like a mobile carrier, you can.

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You can give the old phone and they automatically reduce the price of the new one.

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So the like different options and and and but I think the most important thing is to be more sustainable with the environment.

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So avoid having those phones in at home is something that we should do and we should practise more.

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Of course. Of course. Well, it sounds very attractive.

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I think the idea of combining environmental impact was economic benefits is sounds very interesting.

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And the I was still wondering, how do you ensure a stable inflow of the products because it so much depends on the consumer making a decision,

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evaluating the product and bringing it to swap, you know, a lot of action demanding from the end consumer.

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And OK, now I said stable inflow,

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but is it ever stable inflow flow or you have also trends and fluctuations in the how you're saying that used the phones for your processes?

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Yeah. Well, it's never a stable or like hundred percent stable.

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Of course, what's important when it comes to funds that we purchase from from consumers is to offer.

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Competitive pricing, so it's attractive for them, but when it comes to the supply,

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we British phones from consumers, as I mentioned before, but we also have other channels like insurance companies,

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corporations, etc. So there like always fluctuations, for example, when when there's like new iPhone launch, we happened recently, last month.

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So we see that consumers tend to trade in that old device faster, like models that were like two to three years old.

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Maybe we see like an increase in the other models to decrease. So it really varies on on on what's happened in the market.

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And there are different factors that affect to that, of course.

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So it's never stable. Not really, no. I see. I see.

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OK. And I must ask this question. So how the pandemic affected your operations and the inflow of the used phones and also its sales process?

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Maybe for the sales process we we didn't see like a big impact.

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It's more like the sales were increasing because people were at home and they were able to purchase online.

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So that was like the the selling price was not affected.

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But then on the on the supply we saw, like some, for example, a decrease decrease in in in in volumes.

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The main problem was that all the stores like retailers, mobile carrier stores,

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et cetera, were closed, so consumers were not able to go to these stores.

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And I knew that only buy. So we saw like a significant drop in terms of volume.

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Mm-Hmm. I see. And SYP doesn't have like physical stores.

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You always sell older phones, refurbished phones online, right? Mostly.

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But here in Finland, we have two stores in Helsinki.

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Oh, that's interesting. OK.

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I was wondering like if people could buy online, say, during the pandemic, they go to online store and buy the phones from there.

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Mm-Hmm. Right.

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So as I understood, the refurbished phones offer competitive pricing, and they're also more affordable option than purchasing a brand new phone.

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And in this case, it's really interesting how you define the value of your products because I scroll the web page a little

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bit trying to get ideas for the podcast and the realised that you have different but like value levels,

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and I don't know if that's actually reflect. The quality is in this category still affect the quality of the phone that you will purchase at the end.

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So the question here that comes,

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how do you define the value of the refurbished phones and what is the songwriting process that help you to identify that value behind that?

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So all the devices when when we get them in our warehouse in Helsinki, are they the first station that goes for the sorting?

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So we we sold the fund depending on the model collars, et cetera.

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And then they go to the chicken phase where where we can then decide whether the phone can be reused, refurbished or just recycled.

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The difference is here is like the phones that can be reused later, simply not false, or we can just sell them straight away.

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Of course we do all the data erasure, we clean the phones and et cetera, and the ones that cannot be reused either are refurbished.

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We just change the parts that are not working or simply recycle.

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And for the recycled part, sometimes we are able to reuse part of these phones like,

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for example, cameras or screens that can be used for another device, I see.

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So there are kind of three categories the ones that can be reused as such than the

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ones that need to be repaired or refurbished in the way and the ones with no value.

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And then I really wonder, like, are you able to reuse and refurbish all of the phones from the first two categories?

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And of course, what happens to the ones that you can't and that the ones that have no value?

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Do they also find some sustainable way to end their life the way?

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These are quite interesting question, because when about 50 percent of the phones that we receive done be reused,

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as I said, they buy, sell all the processes,

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same as any other phone like D-type cleaning, checking, etc. But then the rest of the phones are either refurbished or recycled, the refurbished ones.

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Barry Allard. What kind of components we need to change. Sometimes it's only the batteries on balance sheets,

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their screens on the the speakers and then answering the last part of the

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question like what happens with those that cannot simply be refurbished first?

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What we do is like we open the phones, we try to save as much as we can.

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Some pick up some parts of it, right? Exactly.

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Yeah, we can take some of these parts and use it in another device and then the rest are recycled with our certified partners.

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Mm-Hmm. That's really great to hear. So you try to take maximum from each phone and then whatever you can't recycle or use in the

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way you take it to your partners that have some control over their recycling processes.

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So it's great to hear. And so once the phones are checked and you've done necessary checking of.

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Exercises. I think they're like ready for new owners.

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And as I understood the differences in the condition and price level and something that I mentioned before on your web page so you can buy a phone of

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different price level and that when consumers are looking into those differences

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in condition and price doesn't mean that if I get the lower grade phone,

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it will be working worse than the one that is higher level grade. I know all the phones, regardless of their grade, were exactly as a new one.

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The consumers, you said when they go to the website, they can find different options.

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Phones that are like new, very good, grade, good or acceptable.

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It's important to know that all these phones work exactly the same when it comes as a functionality like they work like the good battery.

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They all the components work like the new one.

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But the differences here are the old look the outside part of the phone, like when you buy a phone with lower grade, what you will find is that there,

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like someone scratches some signs of use, but this is something that is not affecting the performance of the phone.

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Of course, of course, it's more like a cosmetic issue. So how your appearance, how they fall in appearance would look like?

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OK. That's extremely interesting. And well, now I have to ask the question about mindset of people buying such phones and also,

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as you mentioned, that there are different categories of appearance.

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It might be also interesting to reflect on customer segmentation by these greats, if, of course, possible.

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So you just tell me who like about your consumers? Who are they?

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Who are these people? Yeah, I got I can say with what is what we see?

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What is the trend of buying refurbished devices? Mm-Hmm. So, so happy customers are mostly young adults.

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We focus on on on young people that are willing to to buy their first phone like maybe on a more affordable option.

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Then we also have a good example, like young parents willing to buy the phones for the kids.

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So I think that it's good for them to to to buy these so they'll be cheaper options like

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but phones that are still as new phones that are having like a really good performance.

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So they can they can really utilise these phones for or for whatever they need on their daily lives.

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Mm-Hmm. What is really interesting for us is that we we see, for example, last year,

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75 percent of our customers were customers buying refurbished devices for the first time.

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So this is like creating more and more awareness, and we see that the trend is changing.

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Mm-Hmm. Mm-Hmm. Yeah, I completely understand the point about parents buying phones for their kids because one of my

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friends exactly bought the phone from Swabi saying that my kids are going to break it anyway.

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So it does happen. And well, awareness is definitely rising,

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and I think it works pretty well that you have this environmental incentive and the economic benefits for people.

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So young adults will definitely be looking into that aspect because it's good for the pocket for their wallets as well.

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And basically, it's also bringing this awareness is rising so people do care about environmental impact that they make with their consumption habits.

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So it's really amazing to see that people are exploring and switching to sustainable alternatives.

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And I hope not only young adults, but then also other categories of consumers will join the sustainable forests and buy refurbished phones.

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And that what I was really wondering is how this affecting or going to affect the market of new electronic devices in general,

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because it feels to me as a market disruption. So there's a new player like sloppy coming in and then selling refurbished devices on the lower price.

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So in that sense, what is your outlook towards the future? What do you think about it?

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The future is looking promising for the refurbished and Second-Hand electronics

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industry is growing very rapidly and on the consumers are changing their behaviour.

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So what we are seeing here is that the statistics are saying is that light is becoming already by 2025, like a 40 billion dollar industry.

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Wow. And yes, that is that really a big change.

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And this is a cause because consumers are changing to a more responsible behaviour.

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They are looking for options that are better for the environment.

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And also the industry is getting more organised, with companies like Swappa offering better options for consumers.

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I see, I see, well, similar insights we see from textile industry, as well as a new Second-Hand options.

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And companies are coming into the industry and also we're looking into more reuse and recycling opportunities.

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So industry is becoming more organised in terms of their supply chain.

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So I can definitely agree with that here with you.

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And you mentioned that the consumer profile will be changing towards more

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responsible behaviour when it comes to purchasing and disposing electronic devices,

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smartphones in particular. In this case, I think it would be great to have a summary of key takeaways from our discussion and the.

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Focus of this key takeaways, I want to be on that becoming a more sustainable consumer of electronics.

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What can we advise people so they can rethink their behaviour and make a shift towards a better consumption behaviour?

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The first thing that I would advise is to recycle or sell all devices that you have at home, just sitting on the shelves.

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You can get some extra money and then save the environment at the same time.

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My my other base is to buy refurbished devices.

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And when it comes to smartphones, just by switching from a new one to refurbish device,

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you can save like about 70 percent of the CO2 emissions because most of these emissions happened during the manufacturing process.

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That's a lot. And and the last advice that I could say I'd like to start purchasing refurbished or other refurbished electronics as well,

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not only as smartphones, but any any other electronics. Mm-Hmm.

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Probably also laptops and anything like exactly. You find all the options in today in the in the market and they're like more and more options.

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And this is like a trend that is changing and increasing.

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That's amazing to hear because of us. Of course, I get to know swoopy through prepare preparations of our podcast,

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but it would be great to know also other options for other electronic devices.

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Well, thank you very much, Philip, for our discussion today.

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It was really interesting for me to take a shift towards the electronic devices from a usual

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perspective of textile industry that I'm studying in my research journey and also doing the podcasts.

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And I hope our listeners find this conversation useful. I really like your key takeaways of the up for becoming a sustainable consumer,

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and I really hope that this trend will continue to grow and that we will see more shift towards responsible consumption in the end.

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On this note, we are reaching the end of our conversation, and I want to thank you for being here with us today,

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sharing your insights and the amazing experience from refurbishing industry.

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Thank you very much and our pleasure. Amazing.

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So we thank our listeners for being with us today, and we hope you stay tuned for more episodes with sustainability unwrapped.