He has found a fortune in the sale of used electronic devices which acquire a second life after passing through the workshop. Created by three entrepreneurs of French origin in 2014, Back Market has become one of the main players in mobile phone refurbishing, which initially had a 4% penetration in the European market and which today covers 36% of the market smartphones marketed in countries such as France and Spain, explains Zaraluce’s Thibaud Hug, founder (along with Quentin Le Brouster and Vianney Vaute) and CEO of the company, by video conference from Barcelona, the company’s third largest office.
“Penetration has increased a lot,” underlines the entrepreneur. “In 2025 we will grow by more than 30% compared to last year and we will reach 3,000 million euros in turnover”. Even if he is not satisfied, because the idea he embraces is that refurbished cell phones will become the most common purchase, “the new normal”, as happens with used cars: “It is rare to buy a new vehicle because it costs a lot and, by doing so, you lose 25% of the value on the same day. We want to do the same with electronic products”, he explains. Back Market has set a goal for these items to reach half of the consumer electronics industry within 10 years.
To achieve this goal, they will increase the portfolio of products offered by the platform “at affordable prices and with the best possible quality”. “These are the ingredients of the strategy that works,” he says. Additionally, they will launch new services. For just over a month they have been offering mobile phone repairs in Spain, which is the company’s proving ground for the rest of the world. They will later expand it to tablets and laptops. Because, they insist on the same idea, they want to “improve quality and offer more services to the consumer so that he does not have to buy new products and adopt the circular economy”. They will also affect the resale of the used product by the customer, an option available on the platform, but which still has a long way to go, the manager appreciates. (In Spain it has allowed 86,000 devices to be exchanged from 2023 at an average of 129 euros per piece). And they will launch the service by the end of the year express replacement whereby dissatisfied buyers will receive a mobile phone of equal or better quality.
“It makes sense to invest in Spain because it is a market where there are a lot of consumers and also a lot of talent. We innovate close to where our engineers are located,” says the CEO.
Back Market’s sales focus on mobile phones (almost 60% of turnover), tablets and laptops. Although now the category that is growing the most are small household appliances from brands such as Dyson, Shark and Ninja, says Hug by Zaraluce, which intends to sign agreements with these companies to expand its product portfolio. The average price of a typical smartphone in Spain is 360 euros, and that’s for the most part iPhone AND Samsung two or three years. It offers an average discount of 300 euros compared to the new product, according to the executive, whose ambition is to provide the same level of quality and service as the new devices. The company offers 30 days to test the product and a two-year warranty. “And we are the only platform that directly manages its own customer service: if something happens, we want to take responsibility.”
User Complaints
However, user complaints are numerous. They accuse them that their devices are repaired without the original components or are not refurbished as Back Market claims (which is also expressed by their competitors). Even Autocontrol, an association that regulates advertising practices, accuses them of misleading advertising. The CEO defends himself: “We will continue to invest in quality, which is non-negotiable,” he says, explaining that only in June of this year did European law oblige brands to make the components of the products they had discontinued available to consumers for seven years. “It’s a very important victory. Before they didn’t sell them and you had to invest to obtain components of the same quality. Now it will be much simpler. But we must continue to enforce the laws. Do the software of the devices can be used for 10 years or more.”
Hug by Zaraluce offers data on the company’s quality improvement: if in 2014 15% of the devices sold had some defect, now it is less than 4%. “We have two laboratories, in Bordeaux and New York, where our engineers test the components before purchasing them to ensure their quality. We need to continue this component selection work. The quality is improving a lot, but now that we have branded components the improvement will accelerate,” he predicts.
In 2024 the company launched two initiatives in this sense: the service prize (devices only with original parts, which already account for about 20% of their sales) and the program that allows you to choose a new battery, since almost half of user complaints concern problems with this element. Today it represents around 10% of turnover.
Most Back Market shoppers are between 18 and 34 years old. They are customers who are looking for “a refurbished product that wins in terms of price and is much better for the environment, since it reduces emissions by 90% compared to the new product”, says the manager, convinced that people spend their money on the things they want, not on the things they need.
Spain is the third country for the company (after France and Germany) and the first in which it landed (in March 2016) when the word restructured did not yet exist, he recalls. It represents 18% of the brand’s business and is the market that “offers the most competitive value proposition because Back Market holds a 70% share of the refurbished market. online; we are the second seller of smartphones online after Amazon.”
The company, which employs 700 people and is present in 16 countries, expects average growth of 20% for the next three years. While it hasn’t reached profitability yet, Back Market hopes to do so next year. But it will deliver results in Europe for the second consecutive year in 2025, according to Zaraluce’s Hug, which refuses to make them public.
Since 2014, Back Market has raised €850 million in funding rounds. Its capital is in the hands of the founders and several investors, including personalities such as Bernard Arnault, president of the LVMH luxury empire, through his Aglae investment fund; or former US Vice President Al Gore through Generation Investment Management. In addition to these funds, the French company General Atlantic, Goldman Sachs and Daphni participate. Although Hug de Zaraluce does not specify how the shares will be distributed, he assures that the founders will continue to have control of the board’s decisions. The last round of funding was in 2022 and the executive does not believe there will be any more in the near term. Yes, there may be outflows of some funds.
