25% of cell phones sold in Brazil are irregular, says manufacturers association – 03/26/2024 – Tech

The volume of cell phones sold illegally in Brazil more than doubled in just one year, and could maintain an upward trend if nothing is done, said representatives of the association of manufacturers of electronic products (Abinee) this Tuesday (26).

According to data released by the entity, the number of illegal devices went from 10% of the total cell phone market in Brazil in 2022 to 25% in the last quarter of 2023, closing the year with a total of 6.2 million units sold illegal in the country. The study cites a survey by the market research company IDC.

“Contrary to what was expected, the number did not decrease, the number grew”, stated the president of Abinee, Humberto Barbato. According to the executive, the practice has taken on “unacceptable proportions”.

The entity stated in a press release that it estimates that 90% of the total smartphones smuggled in Brazil today are sold via marketplaces, with a value 38% below that sold on the official market.

Barbato attributed the significant increase in 2023 to a change in post-pandemic consumption habits, with a greater amount of online shopping.

“The problem is that the marketplace sales model facilitates the sale of irregular products, since a website includes different sellers, and many of them act illegally”, he stated, without mentioning the names of sales locations.

The entity argued that only effective supervision of marketplaces will be able to curb irregular practices.

“We need more energetic actions from the government to curb this practice,” Barbato added in a statement. Abinee estimates that in 2024 the federal government will stop collecting R$4 billion due to tax evasion.

According to the director of the mobile devices area at Abinee, Luiz Claudio Carneiro, the graph for the last few quarters shows an “exponential” increase in the volume of irregular cell phones, which should continue to rise if nothing is done.

But the entity’s president highlighted that he does not expect the 25% percentage to rise, since Abinee’s measures aim to mitigate the upward trend and also “significantly” reduce the gray market.

“The objective of the actions we are adopting is precisely to suppress the growth of this market.”

Market Livre, Brazil’s largest marketplace, said it was acting “proactively” to prevent attempts to misuse its platform.

“As soon as an irregular product is identified on the platform, the ad is deleted and the seller is notified, and may even be definitively banned,” said the company in a statement, reiterating that it collaborates with Anatel and cell phone manufacturers in combating irregular goods.

Amazon said it contractually requires that all products offered on the site have the necessary licenses, authorizations, certifications and approvals, and declarations that they will comply with applicable laws.

“Any breach of these contractual obligations may result in the suspension and interruption of sales of your products, the consequent destruction of any existing inventory in Amazon distribution centers without the right to a refund, as well as the blocking of your seller account”, the company said.

Aliexpress, another e-commerce giant, did not immediately respond to Reuters’ request for comment.