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How Chinese-Based Transsion Became the Top Mobile Phone Seller In Africa

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Spark Smartphone

The Spark 7 series of smartphones, part of the Tecno brand, was released in April 2021. Courtesy of Tecno Mobile.

There are few companies that can say returns on R&D spending led them to the top spot in a crowded market, but Transsion Holdings can do just that.

The company has managed to capture Africa's burgeoning demand for affordable smartphones and feature phones, dominating the mobile phone manufacturing industry. Its suite of brands, Tecno, Infinix and Itel, hold the largest market share of the African smartphone market at 48.2% - three times more than Samsung (16%), which is still the largest globally with a 21.7% market share in Q1 of 2021.

In 2008, Transsion founder George Zhu Zhaojang took a contrarian approach to sales by deciding to focus solely on selling phones in the African market, veering away from an oversaturated market in Asia. To date, the company has not sold a single phone in China, where they are manufactured.

Transsion knew that to win market share the focus would have to be on building brand resonance with the mass market in Africa, where there is both demand for smartphones and feature phones, and increasing migration to 4G networks with lowering data costs.

Transsion Product Shot

A product shot of an Infinix smartphone, part of Transsion's suite of brands.

It is predicted that by 2025 smartphone connections will have doubled in sub-Saharan Africa to reach a total of 678 million users as people increasingly use smartphones to connect to the internet.

In 2019, Transsion did an initial public offering on the Shanghai STAR Stock Exchange to raise sufficient capital to fuel its growth, and it currently holds a $20B total market capitalization.

In the early days of setting up operations in Africa, Transsion made it a priority to have a good understanding of what local consumers wanted in cellphone features and it would send managers from its headquarters in China to live and work in remote locations for extended periods of time. It has also invested significantly in R&D ($113M in 2019), and on sales, marketing campaigns and distribution to create mobile phones that are fit for purpose and tailored to local market needs.

The Org assessed some of the key strategic initiatives Transsion made to become the fastest selling mobile phone maker in Africa.

Selling at the right price points for mass market consumers

Research indicates that smartphones that sell below $200 in Africa tend to perform extremely well, and as a result over 80% of smartphones shipped to the continent fall within this price range. Cellphones that fall below the $100 mark began to gain traction in Q4 of 2019.

In countries such as Kenya, Ghana and Ethiopia, entry level mobile phones cost on average 69% of a person's monthly income, which is why lower cost phones are in higher demand. Transsion understood this and so its entry level Itel IT 406 retails for about $50, while its top of the range Tecno Camon 16 costs on average $232.

The biggest growth markets in Africa for Transsion have been Nigeria, Egypt and South Africa. The company only made its debut in South Africa in March 2020, where the smartphone market has been heavily dominated by brands such as Samsung, Huawei and Xiaomi.

Smartphones quartz graph

Source: qz.com Data: IDC

Customized phone features to meet the needs of African consumers

Transsion pioneered making dual SIM card phones on learning that consumers often have more than two SIM cellphone packages to avoid paying high network fees at a certain time without needing two different phones.

The company worked with technology partners such as Visidon, ArcSoft and SenseTime to develop a camera for the Tecno models that enhances light exposure settings for people with darker skin tones. To combat the impact of frequent power outages — common in some African countries — on the phone's battery life, Transsion worked with Richtek Technology to develop a low-cost battery that charges faster than others in the market, and developed AI driven technologies that optimize power distribution to extend the phone’s battery life.

To expand market share into Ethiopia, Tecno became the first phone brand to offer a keyboard in Amharic and then added Swahili and Hausa keyboards to other Transsion devices.

Invested in localized branding and marketing

To have strong resonance amongst its addressable market, Transsion has allocated big budgets towards billboard advertising in big cities and remote villages on the continent, leading with the Tecno brand.

Strategic endorsements have served the company well, signing on Nigerian Afropop star Wizkid as the brand ambassador for Tecno, and having a multi-year partnership with the English football club Manchester City.

The firm developed its own popular after-sales repair service, Calcare, which operates like Apple Care providing warranty liability for its phones. The three brands have done considerably well in Africa, being featured yearly on the Top 100 Most Admired African Brands list, with Tecno being placed 5th in 2020 ahead of Apple at 6th position.

Transsion Group Shot

A product shot of Itel's S16 series of smartphones. Courtesy of Itel Mobile.

The company has even tapped into the music streaming market to compete with Apple Music and Spotify by creating Boomplay in 2015, which has managed to attract 62 million users. The platform comes as a default app with a range of smartphones, and is also available on the Google Play and Apple App Stores.

Transsion is also in the venture capital game, backing an Africa-focused venture capital firm in partnership with Gobi called Future Hub, which provides early-stage funding to primarily tech-driven start-ups on the continent.

The company has achieved notable success in replicating its model for scale in Africa, India, Southeast Asia and Latin America. But without a doubt it will face stiff competition from other players that want a share of the African market as smartphone penetration and internet adoption increases.

Mobile operator Orange announced it will be partnering with Google to launch the $30 Sanza smartphone in its 18 operations in Africa and Middle East. But competing on price and additional features alone will not be enough. Those who succeed will be the ones creating mobile devices that serve as tools to solve some of the biggest needs on the continent, those that help people build businesses, find meaningful employment, and use technology to provide education at scale.

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