In Nigeria, due to low purchasing power, many people are opting to swap mobile phones instead of buying new ones as prices continue to increase

In Nigeria, the prevailing economic challenges have shifted the focus of individuals from concerns about the future of the nation to the immediate need for survival in the failing economy.

The pervasive sense of uncertainty and instability has led many Nigerians to prioritize day-to-day survival over long-term planning. The ongoing decrease in purchasing power has exacerbated the situation, with the relentless rise in prices of essential goods and services further straining the financial capabilities of the populace. This economic reality has created a sense of urgency among Nigerians to navigate the challenging economic landscape and find ways to cope with the escalating cost of living.

The persistent upward trend in prices has had a ripple effect on various commodities, including mobile phones, in Nigeria. Previously, individuals who favored owning multiple high-end phones have now streamlined their preferences to a single device due to the economic strain. Economy&Lifestyle research indicates that as the economic conditions deteriorate, many Nigerians are resorting to swapping their old phones for newer models as a practical solution to keep up with technological advancements while managing their limited resources.

Explaining the process, Evans Ofili, a manager at a phone and electronic gadget store in Igando, outlined that phone swapping is a straightforward procedure. Customers are required to bring in their old phone along with the purchase receipt and a valid form of identification. The store assesses the old phone by testing its battery power and other components to determine its current value. Subsequently, the customer is asked to contribute a nominal amount to acquire their desired phone.

For example, if the preferred phone is priced at N100,000 and the assessed value of the old phone is N30,000, the customer would need to pay the difference of N70,000 to complete the swap. This process enables customers to upgrade their devices without bearing the full cost of a new phone, making it a practical solution for individuals facing financial constraints in the current economic climate.

While phone swapping has been a longstanding practice, it was not widely embraced by Nigerians until recently. Traditionally, individuals would typically pass on their old phones to family members or loved ones upon purchasing a new device. However, the prevailing economic challenges have prompted a shift in consumer behavior, with many opting for phone swapping as a more cost-effective alternative to purchasing new phones outright.

In the current scenario, there has been a noticeable decline in the outright purchase of new phones, as more individuals are turning to phone swapping as a practical solution to upgrade their devices while managing their finances effectively. This shift in consumer behavior reflects the adaptability of Nigerians in navigating the economic constraints and finding innovative ways to meet their technological needs.

In addition to catering to the changing consumer preferences driven by economic constraints, phone retailers have also adapted their sales strategies to boost sales and cater to the evolving needs of customers. Evans Ofili highlighted that apart from the traditional phone swapping practice, old phones are repaired and exchanged for other devices, providing customers with more options for upgrading their phones while ensuring sustainability in the market.

Furthermore, Mr. Jeremiah Santos, a Manager at a phone hub in Egbeda, shared insights into the evolving sales practices within the industry. He noted that in response to the shifting consumer behavior and economic challenges, phone sellers have begun offering phones on credit to customers. This flexible payment option allows individuals to acquire new devices without the immediate financial burden, reflecting the industry's commitment to adapting to the changing market dynamics and meeting the diverse needs of consumers.

In response to the economic challenges and changing consumer behavior, phone sellers have introduced innovative payment schemes to facilitate the acquisition of mobile phones. One such scheme involves an installment payment plan offered in collaboration with a specific brand of phones. Customers have the option to sign up for full payment of the mobile phone over a period of three or six months, with an interest rate as low as 4 percent.

Under this scheme, customers are typically required to make a down payment of 20-25 percent of the device's value, depending on the seller's terms. In the event of a default in completing the payment by the agreed date, customers may incur a 2 percent or higher default fee. These flexible payment options not only enable customers to afford new phones without immediate financial strain but also provide phone sellers with a competitive edge in the market.

The implementation of such strategies reflects the adaptability of phone sellers to the prevailing economic conditions and their commitment to meeting the evolving needs of customers in a challenging economic environment.

The rising costs associated with importing mobile phones are also impacting phone sellers, with expenses escalating due to various factors such as port charges, fluctuations in the dollar exchange rate, logistics costs, and other related expenses. This increase in operational costs has placed additional financial strain on phone sellers, mirroring the challenges faced by their customers in navigating the economic landscape.

Investigations have revealed a noticeable uptick in the prices of popular phone brands in the market. Brands such as Samsung, Infinix, Nokia, Tecno, Microsoft, Xiaomi Redmi, and Itel have experienced price hikes, particularly for models with lower storage capacities (ROM), limited memory (RAM), and moderate battery capacities. The combination of increased import costs and market dynamics has contributed to the upward trend in phone prices, posing challenges for both sellers and consumers alike in the current economic climate.