While Filipinos tend to buy their gadgets, particularly mobile phones, in ?tiangge? or secondhand stalls because of cost considerations, they also want the security and convenience that a mall shop gives for their precious devices.
This segment ? between the gray unit and premium markets ? is what rising phone retailer TechBox is trying to hit as it announced plans to ramp up its presence in different locations around the country.
Launched as a mobile phone exhibit at the Alphaland Mall in November 2012, TechBox has since opened its first three retail kiosks in SM Sta. Mesa, SM Sta. Rosa, and SM Pampanga in December of 2012. The Alphaland kiosk, after showing promising sales results, also became a permanent stall.
In a span of nine months, TechBox opened 19 stores in different malls in the Greater Manila Area and Luzon carrying brands such as Lenovo, Nokia, LG, HTC, and Belkin accessories. It set to open its 20th branch this November its first in-line store at the Gateway Mall in Cubao, Quezon City.
TechBox is owned by local conglomerate Tao Corporation, which also counts the local distributors of Lenovo and Nokia mobile phones as among its subsidiaries.
According to Dickie Buhain of Technology In Motion, the gray unit or white box handset market — this means mobile phones bought in secondhand shops in small gadget stalls that line the inside of the Greenhills and Makati Cinema Square shopping centers — hit its peak in 2011.
“A total number of 250 million handsets were in the trade” that year, Buhain said. Since 2012, the gadget gray market “showed a significant decline at 220 million units and shall continue with this trend till 2014, which will drop to 175 million units worldwide.”
In a price-sensitive market like the Philippines, lower costs make items like mobile phones, computers and digital peripheral devices infinitely more attractive. Hence the many “brand new” knock-offs and counterfeit items sitting cheek to jowl with the secondhand real McCoy on this gray market’s shelves.
“Initially, the consumer would feel that buying a knock-off is practical, considering the huge difference in terms of the unit price,” Buhain said. “However, looking at it from a long term basis, because of the low quality and danger that comes with the cheap prices, the consumer will never get his money?s worth in buying knock-offs.”
Batteries, particularly, can be dangerous because they contain combustible and explosive materials. Knock-off and off-production batteries may heat up dangerously while charging and, some have been known to explode.
“Perceived ‘savings’ from buying pirated and counterfeit products is only temporary,” he noted. “The mean time before failure is shorter and the replacement time for the consumer is a lot faster due to the sub-par quality of these products. Worse, they do not provide the same protection and performance that the originals can assure. Therefore, it is costlier in the medium to long-run.”
“For cases, your phone gets more damaged when you drop it, you get no shock protection.” Buhain pointed out. “For waterproof or water resistant cases, using knock-offs can actually damage severely your smartphone if used underwater. These products also deteriorate at a much faster pace because the build quality is just horrible.”
Angela Gutierrez, Techbox business unit head, said getting high-quality products is better in the long-run.
“All of the gray market units that we see pose a great risk to our health in terms of the radio frequencies they emit,” Gutierrez added. “Substandard batteries and chargers can harm the environment and their users.”
Buhain also advised consumers to “examine the quality and consistency of the product packaging for authentication marks, usually holographic seals. Know the price or SRP beforehand so that you can check whether a product is suspiciously cheap. That in the end is the biggest tell if what you are buying is authentic and the real deal.”
“Examples of counterfeit cases that are sold here capitalize on the popularity of global brands such as Belkin, Spigen, Element, Otterbox, Speck, Lifeproof, Moshi, etc,” Buhain added.
“These are clearly rip-offs of these original brands and compromise the intellectual property rights and trademarks of these brands. For battery packs, Mophie is a brand that has been counterfeited extensively.”
“Additional expenses usually happen if you need to have your unit repaired or to spend additional cost in purchasing defective parts for replacement,” Buhain added, spelling out another black mark against knock-off gadgets.
He noted that these fakes are usually manufactured with substandard components: “All of the fake items in the market whether these are bags, clothes, perfumes, shoes or devices are all made out of low-quality materials, hence the cheap price.”
Another common problem when one speaks of fake phones — those suspiciously cheap iPhones and Samsung Galaxy handsets flooding the market — “is the poor signal quality,” Gutierrez said.
?You buy phones to be able to communicate. Poor signal means poor communication and, in the end the user does not get his money’s worth,? she said.
Buhain said “Techbox offers all original handsets and accessories at a reasonable price to give consumers the peace of mind because of the warranty that covers the handset.”
He said Techbox ensures the quality consumers expect from their product offerings. “We strive to get to know the suppliers beforehand. Verify and validate the country of origin. We test the products first for some time before ordering for distribution. We also check who else do they sell these products to in the Philippines as well as in other markets.”
He also pointed out that Techbox prices, when compared to genuine and authentic competing products, “is competitive?.
?We try to adhere to the SRP set by the manufacturer in the region. We also try to provide one of the highest values for money propositions for mobile accessories,” he added.
Noting the booming online trade, Buhain said Techbox will also offer handsets through its website soon.
