Africa is a continent with a huge demand for smartphones, but also a high level of poverty and economic hardship. This creates a challenge for smartphone manufacturers who want to tap into this lucrative market. How can they offer quality products that are affordable and appealing to the masses?
Two Chinese brands, Transsion and Xiaomi, seem to have found the answer. According to data from Canalys, a market research firm, they accounted for 85 per cent of the smartphone shipments into Nigeria in the third quarter of 2023, beating rivals like Samsung and Apple.
Transsion is the maker of popular brands such as Tecno, Infinix, and itel, which have been dominating the African market for years. The company has a strategy of creating multiple brands that cater to different segments of the market, from low-end to mid-range devices. Transsion also has a strong distribution network and after-sales service across the continent, as well as a deep understanding of the local consumer preferences and needs.
Xiaomi, on the other hand, is a newcomer to the African market, having entered Nigeria in 2019 with the launch of its Redmi Note 7. The company has a reputation for offering high-end features and performance at a fraction of the cost of its competitors. Xiaomi also leverages its online presence and social media influence to attract and engage customers.
Both Transsion and Xiaomi have been able to offer smartphones that are cheaper than their rivals, thanks to lower labour costs and economies of scale in China, where they produce most of their devices. A BusinessDay market research found Transsion’s devices among the cheapest in markets across Lagos, Nigeria.
The success of these Chinese brands reflects a broader trend of China’s increasing influence and investment in Africa, especially in the technology sector. China has been building infrastructure, providing loans, and supporting innovation and entrepreneurship in the continent, as part of its Belt and Road Initiative. China is also the largest trading partner and creditor of Africa, with bilateral trade reaching $208 billion in 2021, according to the China-Africa Research Initiative at Johns Hopkins University.
However, Chinese smartphone vendors also face some challenges and risks in the African market. One is the competition from other brands, such as Samsung, which ranked second in Africa in the second quarter of 2023, according to IDC. Samsung has been trying to regain its market share by launching new models and offering discounts and promotions. Another challenge is the regulatory and political uncertainty in some African countries, which could affect the business environment and consumer confidence. For example, Nigeria recently banned Twitter, a popular social media platform, over alleged national security concerns.
Despite these hurdles, the outlook for the smartphone market in Africa remains positive, as more people switch from feature phones to smartphones, and as internet penetration and digital services grow. IDC predicts that the smartphone market in Africa will recover further in 2024, although it will not surpass the level of 2021, which was a peak year. The Chinese smartphone vendors, with their low prices and high quality, are well-positioned to take advantage of this opportunity and expand their customer base and brand loyalty in Africa.
Source: BusinessDay
