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China’s Transsion dominates African mobile phone market

Mobile devices

China’s Transsion dominates African mobile phone market

Group sells more smartphones in Africa than any other company and is now targeting India

A cyclist stops to make a mobile phone call in Lagos, Nigeria. Transsion has adapted its low-cost phones to suit local tastes © Bloomberg

Solid design and low prices helped China’s Transsion Holdings overtake Samsung this year to become the number one smartphone company by sales in Africa, and now it is making inroads into India.

The Shenzhen-based company — best known by the names of its Itel brands — sold more than 50m phones in Africa in the first half of this year, mainly “feature” models with physical keypads, according to technology research group IDC.

That cemented its status as the continent’s biggest phone producer and included 11m smartphones, putting it ahead of its South Korean rival.

Globally, Transsion is number four in terms of units sold after Samsung, Apple and China’s Huawei, according to IDC, though low prices mean it is only the 13th largest phone manufacturer by sales value.

Since launching in 2016, Itel phones have also captured an 8 per cent share of India’s handset market, making it the third largest brand, according to Counterpoint Research, a consultancy. This success has been thanks to cheap prices and good distribution, said Tarun Pathak, an analyst at Counterpoint Research.

Transsion took an unusual route of ignoring the Chinese market to build its sales in sub-Saharan Africa, adapting low-cost phones to local tastes. For instance, its handsets feature multiple sim-card slots, camera software adapted to better-capture darker skin tones, and speakers with enhanced bass. 

Sales in Africa could top 100m units this year, helping the company generate more than Rmb20bn ($3bn) in revenue, said founder and chief executive Zhu Zhaojiang. “I don’t target the highest-income consumers who would buy Apple or Samsung,” he added.

The company will export 120m handsets this year, according to Mr Zhu — making it China’s largest phone exporter by volume, though margins are lower than rivals due to the lower-cost of Transsion phones, which can sell for as little as $10. “In volume terms we are bigger than Huawei, though in value terms they are bigger,” he said. 

About 216m phones were sold in Africa last year, according to IDC, of which 57 per cent were feature phones.

Transsion’s success is based on its ability to “match key phones from its main rivals, but at more attractive prices”, according to Simon Baker, an IDC analyst. The company also “established a reputation for ensuring widespread distribution of its phones and providing support in marketing”.

In Africa, Transsion brands include Itel — originally a marque for feature phones and still the company’s biggest seller — and pricier smartphone brands Tecno and Infinix, which generate most revenue, according to Mr Zhu. He said Transsion phones typically retail for about $100. 

The group is now targeting south Asia. “We will head out of Africa to other emerging markets,” said Mr Zhu. “In the future our focus will be on north Africa, India and the Middle East.”

Sales of several million units in India will help Transsion sell about 20 per cent of its phones outside Africa this year, he adds. IDC said the brand stood took second place in the Indian mobile phone market in the last quarter of 2016. 

Transsion is also moving its manufacturing out of China, building a factory in India and an “industrial park” in Ethiopia where it already makes some phones.

Twitter: @hancocktom

Additional reporting by Andrea Rodrigues in Mumbai

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