Think quickly—— How much does the top-of-the-line iPhone 15 Pro Max cost? If you said around $1,600, you’d be right, but only if you live in the US and Turkey, where the same phone will cost you almost $3,000. This gap creates excellent arbitrage opportunities – and an active second-hand and refurbished market. Getmobil just raised $4 million to legalize phone refurbishment in the country.
“The Turkish government wants to reduce the trade deficit,” Getmobil CEO and founder Mehmet Uygun explained. “The government wants to create a circular economy. They don’t want customers to buy a brand new phone because every time a customer buys a brand new phone, dollars are leaving the country.”
Global economic and trade policies are fascinating and can lead to some very strange oddities in local cellphone markets. For example, in 2010, Argentina introduced a set of rules that meant that if you wanted to sell a product in the country, you had to manufacture it there. This had a lot of strange effects; English-language books became almost unavailable, or ridiculously expensive (I remember paying $65 for a copy of Walter Isaacson’s Stevenson in a bookstore in Buenos Aires). A biography of Steve Jobs, which sold for about $29 in the United States at the time). This also means that Apple completely withdraws from the market and chooses not to sell iPhones in Argentina. Suddenly, long after everyone else had more or less forgotten that BlackBerry existed, the phone brand had a resurgence in the country when it decided to build an assembly plant there.
The same thing is currently happening in Türkiye. Turkey is eager to keep gross domestic production within its own borders, so it imposes high import taxes on mobile phones. Getting around these restrictions isn’t easy either – if you sneak a phone into the country, its IMEI will be blocked by the three major networks after 120 days.
The Getmobil team outside the headquarters and repair lab. Image Source: Gabby
Clearly, people still want mobile phones, but, unwilling or unable to pay impossibly high import taxes, they seek other solutions. Getmobil started as a humble mobile phone repair shop and has grown into one of Turkey’s leading e-commerce platforms, specializing in selling refurbished electronics.
The main investor is the somewhat confusingly named Dutch Founders Fund (DFF), which invested in Getmobil. “While DFF is headquartered in the Netherlands, our focus at DFF is investing in seed-stage B2B markets,” said Hidde Hoogcarspel, co-founder and managing partner of DFF. “Our portfolio companies are not only spread across Europe, but also in Dubai. and regions such as Egypt. These markets often operate across borders and sometimes globally.”
Where there is friction, there is opportunity
As Getmobil’s founders navigated the complexities of the electronics repair market, they discovered a huge gap between the high cost of brand-new equipment and consumer desire for more economically viable alternatives. This realization led us to move from just repairing equipment to refurbishing and selling it, laying the foundation for Getmobil’s core business model.
By imposing high tariffs, the Turkish government has created a gray market: people buy and sell mobile phones with cash without notifying the government. The benefit is that the money stays within the borders of the country, but apparently, no one taxes it along the way, so this raises a new question: Yes, the money circulates, but none of it flows into the country’s coffers.
“Turkey is definitely an exceptional refurbishment market. The price of a new iPhone in Ankara is much higher than anywhere else in the world. The government has a unique and far-reaching regulatory framework and incentive program in place, and imports are restricted,” Hoogcarspel explained. “The formal renovation industry in Turkey is still in its early stages; this informal Trade is booming, with new equipment sales expected to exceed the overall market size of $7 billion. Tens of thousands of traders operate in this informal market segment. “
To control the situation, the government has brought about some significant changes, including some new regulations, tax incentives and opportunities. In 2021, Turkey introduced a series of regulations that significantly boosted the refurbished electronics market, creating a more structured and reliable framework for companies operating in the industry. These regulatory changes are intended to encourage sustainable consumption practices, improve the quality and reliability of refurbished devices, and reduce the environmental impact of e-waste.
“[The Turkish government] Provisions for refurbishment centers introduced. They said, “If you build a renovation center to some specific standards, we won’t charge 20 percent tax, we will charge 1 percent,” Uygun explained. In addition, the government is also allowing vetted refurbishment centers to offer installment services without having to pay the full cost of the equipment. The founder explains that this is unusual because consumer credit in Turkey is highly regulated. They said Apple couldn’t offer installment plans.
Getmobil’s growth trajectory has been remarkable, driven by strategic vision, operational excellence and a deep understanding of Turkey’s electronics and regulatory markets. The company’s rise has been characterized by its ability to provide consumers with high-quality refurbished electronics at competitive prices, thereby filling a critical market gap. This value proposition has helped Getmobil win over consumers and made the company a major player in Turkey’s electronics industry. And, presumably, the government is pleased to have taken another step towards regulating the out-of-control second-hand market.
Winner: Local Economy and Environment
There is no doubt that the main driver behind government regulation is revenue, but forcing the repair and second-hand markets to become stronger will have many positive side effects, such as a significant increase in the useful life of equipment and a significant reduction in the useful life of equipment. electronic waste.
Prior to the introduction of the regulations, Turkey’s refurbished electronics market was chaotic and fragmented, with the quality and warranty coverage of used equipment highly variable. The new framework implemented sets strict standards for the refurbishment process, including quality checks, warranty requirements and after-sales services. This legislative environment plays a key role in leveling the playing field. Getmobil gives itself an advantage by complying with government regulations – and by its commitment to following the rules and adhering to high standards of quality and customer service, the company gives itself a huge competitive advantage.
By aligning the interests of the customer (cost and quality), the government (keeping the money within Turkey and collecting some taxes along the way) and Getmobil, everyone wins. Reuse, repair, refurbishment and recycling extend the circular economy to a wider user base and mean some environmental improvements too.
Navigating the complex Turkish electronics market presented Getmobil with a unique set of challenges and opportunities. The team told TechCrunch that the pervasive black market remains a huge challenge: This shadow economy not only reduces the price of legitimate refurbished electronics, but also often compromises quality and after-sales service, posing a significant threat to consumer trust. Additionally, keeping up with and complying with Turkey’s ever-changing regulatory environment adds another layer of complexity to Getmobil’s operations.
Depends on regulation
Of course, the first step in suppressing the black market is creating alternatives to it, and that’s where regulations and this round of funding from Getmobil come in.
Whether this is a good investment for investors remains to be seen. DFF clearly believes there is a huge opportunity here, but in the process it has invested in businesses that are essentially made possible by government regulations that stifle cross-border trade. Turkey is not a member of the EU (conversations are deadlocked over alleged human rights abuses by the Turkish government), but if it became an EU member, Getmobil’s entire business model would collapse: EU countries cannot impose trade tariffs on: cross-border imports and exports, Without this, it’s easy to imagine the Turkish market being flooded with second-hand and new electronics at the same price as the rest of the EU.
Whether Getmobil’s future is secure depends entirely on geopolitical events and which way the trade tariff winds blow tomorrow.
