The company Back Market, or online marketplace in good French, celebrates its 10th anniversary in 2024, while the refurbished market has exploded in recent years. Mobile phones, in particular, are increasingly bought second-hand rather than new. Thibaud Hug de Larauze, President and co-founder of Back Market is the economic guest of franceinfo on Thursday, September 19.
franceinfo: The refurbished market has exploded. What is this due to? Ever more expensive phones, which people prefer to repair rather than buy another one. Or is it rather due to an ecological conscience?
Thibaud Hug de Larauze: A bit of both. What will push the French to choose a refurbished phone rather than a new one is first of all a price saving. It still costs half as much. New products always cost more and therefore spending 1,000 euros or more on a new terminal no longer makes sense today and it makes less and less sense every year.
The fact that new mobile phones are becoming more and more expensive, is that rather a boon for a market like yours?
What is a boon for developing the circular economy and the sale of refurbished products is that there is no more innovation. To be very concrete, I invite you to tell me the difference between an iPhone from eight years ago and an iPhone today.
Xavier Niel said yesterday that he would have loved to invent the iPhone, but that he would have been incapable of selling it at the price it is sold for today.
These are still very good products. But it’s a lot of marketing. Today, we offer an easy alternative to French consumers, which is to buy a reconditioned terminal online that will cost between 50 and 70% less, with the same guarantees as on the new one.
In France, there is the circular economy law that taxes manufacturers and then finances this tax, a reconditioning circuit. Do you benefit from this tax?
No, everything is not yet perfect in France, it is progressing. But if we talk about the ecotax and this tax that is collected each time a new product is sold. Today, 100% has been used by eco-organizations to finance the recycling of these products.
So not that they are bought by other customers, but to use the raw material.
Except that we must first try to repair these products, recondition them and resell them since there is already demand to buy these products rather than dismantling them and burning them to then create energy which is sold afterwards.
So you think this tax could benefit a market like yours?
I think it should. I think it wouldn’t cost the State a single euro more. This tax already exists and is levied on the sale of products, but it is only used for recycling. Today, a good portion should be used to train repairers and to ensure that products are repaired and reconditioned more often.
Your customer, originally, is a consumer who comes to buy a reconditioned phone on your platform. Now, you are also increasingly forming partnerships with distributors, Bouygues Telecom in France, Verizon in the United States. Is this to prevent them from creating their own channels without you?
Not at all. Our goal is to democratize the consumption of reconditioned products. Today, one in three French people buy their terminal reconditioned, so it’s already six times better than ten years ago, but it’s not enough. The majority of terminals are still bought new. So what we say to ourselves is that we’re not going to ask too much effort from the French, we’re not going to ask too much effort, even from American citizens…
But if Bouygues Telecom offers your products in their stores, they are not going to create their own sector.
No, precisely, they will rely on each other and that is the whole benefit of this partnership. Bouygues Télécom is an established network that works very well, that is known by all French people. Back Market is now starting to be known by all French people for reconditioned products. So we combine the best of both worlds. We offer reconditioned terminals at Bouygues Télécom and Bouygues Télécom offers plans at Back Market that today allow Back Market consumers to benefit from a reduction of 120 euros when they buy a terminal and a plan from us.
Orange encourages its customers to bring their phones back to the store so that they have a second life. Now that, for once, creates competition for you.
No, that’s magnificent, on the contrary.
“There are 100 million products that remain and are sleeping in the drawers of the French. That is a big problem.”
Thibaud Hug de Larauze, President of Back Marketto franceinfo
We don’t realize that our products, when we no longer use them, still have a lot of value.
But this is less and less true.
Unfortunately, this is still too true. And that’s why we created an application. And we’re going to encourage the French to resell their products that they no longer use to get money back.
The consumer protection association UFC-Que Choisir has filed a complaint against Back Market for misleading commercial practices. The prices displayed on your site are presented as promotions with crossed out prices and reduced prices. Except that, according to the UFC, you are comparing the price of the new product with that of the reconditioned product, when it has nothing to do with it. What do you say?
What I am saying is that I believe that we are standing firm, that the consumer must be informed. The advantage that I was telling you about first, for a consumer, is a price saving.
Except you’re comparing dish towels to napkins.
No, it’s the same product. Here, for example, in my pocket, I have an iPhone 8 Plus, I could buy it new, I could buy it refurbished…
Yes, but refurbished means it already has some wear and tear, so it costs less.
So it costs less and that’s normal.
Yes, by comparing these two prices, you can understand that UFC-Que Choisir says that the consumer is a little misled about the savings that are made, even if they are real.
We always start from what consumers tell us. So we ask consumers for their feedback and that’s how we’ve been building the platform for ten years and we continue to build it.
“Today, if we have succeeded in increasing the consumption of reconditioned products, it is because these 15 million customers that we have had for ten years are happy since we have made twice as many orders since our launch.”
Thibaud Hug de Larauze, President of Back Marketto franceinfo
So, customers, when they come once and they come back once. I think that’s what’s most important. That they’re satisfied with their experience so that they buy refurbished rather than new.
So it’s not a cheat?
No, it’s not a deception. It’s pretty clear. Afterwards, I’ll let everyone judge.
But there is consumer law.
So, that’s why the information is clearly explicit on the site. When you look at a product sheet, you are told here is the new reference price of this product, here is the price of the reconditioned product. Then, you choose the aesthetic condition of your product, you choose whether you want a new battery or not, you choose whether you want a Bouygues package or not, but we make it simple and as transparent as possible.
Your company, Back Market, is one of the rare French unicorns valued at more than a billion dollars. It is now worth five times more. And yet, you are only starting to be profitable this year, in 2024. So it is a market that is maturing little by little. It is actually complicated to make money.
No, it’s not that it’s complicated, it’s that Back Market has an ambition that goes beyond French territory. What we want is to be able to democratize the consumption of reconditioned products. That’s why we are present in 18 countries on three continents. France is our historic market, it’s our baby. We’ve been here for ten years, we’re French, the three founders, so it’s the first market we developed. And thanks to the profits, the profitability we have in France, we finance our international expansion in Japan, the United States and that’s how we developed the company from the beginning. So, we chose to invest in international development to democratize reconditioned products.