More than 7 out of 10 phones that are no longer used do not come onto the used market, a survey showed. Worries about personal data leaks and distrust of the transaction process are blocking wider distribution, and critics say awareness and use of the government's 'Used Phone Safe Trade Business Certification Scheme' must be raised more than a year after its launch.

◆Used phone market grows to 6.81 million units...72 percent still outside the market

A report by the Korea Information Society Development Institute (KISDI) said South Korea's used phone market grew from 6.2 million units in 2023 to 6.35 million units in 2024 and 6.81 million units last year. Still, the share of end-of-use devices that actually flow into the used phone market remained low. The sellable share last year was 27.9 percent. The remaining 72.1 percent did not enter the used market for reasons such as disposal, donation or permanent storage.

Anxiety about personal data leaks was cited as the biggest factor blocking distribution. The report pointed to concerns about personal data leaks, at 50.8 percent, and the hassle of the transaction process, at 32.7 percent, as key reasons for not participating in the used phone market. If the current trend continues, the sellable share of end-of-use devices is expected to rise by only about 1.2 percentage points a year.

◆More than 1 year on from safe certification..."Lack of promotion consumers can feel"

The Ministry of Science and ICT introduced the Used Phone Safe Trade Business Certification Scheme in May last year. Under the scheme, the government certifies distributors that have procedures to delete personal information and provide user-protection information such as purchase prices by device grade.

The number of certified businesses rose to more than 50 about a year after the scheme began. Still, criticism persists over whether consumers have been sufficiently informed, separate from the increase in the number of certified firms. Some also say it is important to expand the scheme so that more used phone businesses and telecom distributors adhere to basic transaction standards.

An official at a certified used phone safe-trade business said the certification process is not very difficult. The official said the key is to comply with what should basically be done in used phone transactions, such as drawing up a contract, deleting data, and disclosing device grades and pricing standards.

The official added that agencies can be certified if they meet the standards and there is no need for certification itself to be difficult. The official said there are more than 10,000 telecom stores alone, and having only dozens of certified businesses means the scheme has yet to be sufficiently activated.

The need has also been raised to refine the system so consumers can clearly understand the scope of 'certification' as the number of certified businesses increases. Some mobile carriers and large operators jointly use a used phone purchase system or unmanned purchase machines built by their headquarters across multiple stores. Confusion on the ground has been detected over whether individual stores using such systems can be regarded as certified businesses even if the system itself meets certification standards.

◆Market can grow if 'drawer phones' are brought out...industry stresses security support measures

Market growth itself is clear. KISDI said the share of used phone transactions sold to businesses was 67.1 percent last year, more than double the 32.9 percent share of person-to-person deals.

Participants in the field also say they are seeing rising demand for used phones. One business that received certification early after the scheme was introduced last year has recently seen its used phone purchases more than double from previous levels. Industry officials commonly say the used phone market has strong potential as flagship smartphones remain expensive and performance among older models has become more uniform.

The KISDI report said bundle purchase programs by used phone buyers or campaigns to collect stored phones can make a tangible contribution to expanding the market. It said policy incentives to collect devices kept in storage when consumers replace their phones are expected to be particularly effective.

Increasing the number of certified businesses, along with ensuring consumers feel the scheme's benefits during the actual transaction process, was cited as a task going forward. The industry also says the government should pair the scheme with practical support measures such as providing security solutions for certified businesses to delete personal information.

An industry official said it is hard to feel government-level promotional activities for the certification scheme. The official said the government needs to promote the scheme more widely using media that ordinary consumers can access.