Chinese-made phones are calling the shots in Africa as they beat global giants Samsung and Apple

Along the bustling Luthuli Avenue in downtown Nairobi, banners and billboards advertise mobile phones to the throng of shoppers passing by.

The blue, red, black and white storefronts in the busy Kenyan shopping district denote the colours associated with some of Africa's bestselling phone brands - Tecno, Infinix and iTel.

They are all phones that are made in China. But most people in mainland China will not have heard of them. After all, they have never been sold there.

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That is because all three phone brands are manufactured by Transsion, a Shenzhen-based company that made its fortune exclusively selling phones in Africa - before it expanded into other markets such as Latin America, India, Eastern Europe and Southeast Asia.

In fact, Transsion has made such a success of its sales strategy that in 2023 its Tecno brand sold more smartphones in the Middle East and Africa than Samsung or Apple.

It is a feat that has helped cement Chinese tech diplomacy in the region - and has in turn attracted a growing number of Chinese technology firms into Africa and the Middle East.

Tecno smartphone shipments grew by 77 per cent year on year in the fourth quarter of last year, surpassing Samsung to lead the Middle East and Africa region for the first time, according to data from Hong Kong-based firm Counterpoint Research.

During the same period, Tecno's smartphone shipment market share increased to 20 per cent from 15 per cent in 2022, while Samsung's market share dropped from 24 per cent in 2022 to 18 per cent.

According to Counterpoint, Tecno's growth was driven by handsets in the US$150 price band, with models such as the Tecno Pop 7 and the Camon 20 Pro proving popular with consumers.

Economic factors may also have played a part in Transsion's 2023 success, according to Yang Wang, a senior analyst at Counterpoint Research. He said the growth - seen particularly by Tecno - was mainly due to a much better macroeconomic environment, as inflation and energy prices came down, while local African currencies stabilised across most countries.

Wang said this had a sizeable effect in boosting consumer confidence, particularly among the lower-income audience.

"Transsion brands benefited the most from these tailwinds as they are the most invested in Africa's mid-to-lower tier smartphone segments, among the biggest brands," he said.

Sell quality phones in the budget segment, such as this Tecno Spark 8c, has been a winning formula for Transsion. Photo: Shutterstock alt=Sell quality phones in the budget segment, such as this Tecno Spark 8c, has been a winning formula for Transsion. Photo: Shutterstock>

The company's products in the affordable segment have been a key part of its success. Looking at African sales alone, Tecno had already managed to pass Samsung back in 2020. That was largely due to the successful launch of phone models in the lower price band, as well as continued market spending.

Wang said Tecno was notable in its continued investments in marketing and channel penetration, as well as ambitious plans to launch premium-grade smartphones such as foldables, which increased the brand's credibility among audiences.

It is a strategy that has worked. Transsion is now the dominant mobile phone manufacturer through the entire Middle East and Africa region, taking more than 36 per cent of the shipments market share in the fourth quarter of 2023 and 32 per cent across the whole year.

Together, Tecno, Infinix and iTel accounted for 48 per cent of the smartphone market in Africa in 2023. Tecno alone held 26 per cent of the African smartphone market share while Infinix and iTel had 12 per cent and 10 per cent market shares respectively.

For more than a decade, Transsion, which is listed on the Star Market section of the Shanghai Stock Exchange, made its money by exclusively selling its mobile phones in Africa. But in recent years it has expanded into other markets.

Its success has been attributed to superior marketing and understanding consumer needs, such as making dual SIM card phones and camera phones better calibrated for darker skin tones.

According to technology research firm International Data Corporation (IDC), Transsion shipped 95 million smartphone units last year - 30.8 per cent more than it did in 2022. IDC said Africa was the biggest contributor to Transsion's entry into the top five worldwide vendors for the first time.

Meanwhile, South Korea's Samsung ranks second with a market share of 16 per cent in Africa, though sales remained flat in 2023.

Besides Transsion, other Chinese mobile phone brands include Xiaomi and Oppo. Xiaomi, one of the top-selling Chinese smartphones globally, had a 7 per cent market share in Africa in 2023, mainly due to widening product availability and geographic reach. Oppo had a 5 per cent smartphone shipment share in Africa.

But Transsion did not start big when it entered the African market in 2008. Back then, when it launched its operations in Kenya, its office was on the second floor of a building along that same, crowded Luthuli Avenue which these days is festooned with the company's branding and billboards.

It was from this noisy street that the company established its base to grow and expand into other markets in Africa, including setting up a manufacturing plant in Ethiopia.

Since those early days, Transsion has now moved its office to a quieter part of the city at Cardinal Otunga Plaza on Kaunda Street in central Nairobi, but it has kept the Luthuli Complex office as a service centre.

Transsion began its African trading from a nondescript office on the second floor of a building in downtown Nairobi, Kenya. It now dominates the phone market across the continent. Photo: Shutterstock alt=Transsion began its African trading from a nondescript office on the second floor of a building in downtown Nairobi, Kenya. It now dominates the phone market across the continent. Photo: Shutterstock>

However not all Chinese phone companies have had such sales success stories in Africa. Huawei Technologies has seen its market share in Africa drop from 10 per cent in 2019 to about 1 per cent in recent years.

"Huawei was indeed one of the biggest players in the region, but sales dropped sharply after 2020 when US sanctions starved the company from access to GMS [Google Mobile Services] and chipsets," Wang said.

"[Huawei] has been on the rebound in 2023 but now accounts for less than 1 per cent of the market."

That said, Huawei Technologies is a big player in the enterprise business in Africa, where it dominates built data centres, cloud services, networks and internet connectivity infrastructure.

Sub-Saharan geoeconomic analyst Aly-Khan Satchu said Chinese mobile phone brands "are ubiquitous across the continent".

He said this speaks to the Chinese ability to get up close and personal to its demand curve as well as the skill to price appropriately without compromising on the features suite. He added that this is not unique to handsets, but applies across the consumer space.

For Huawei, Satchu said the company is competing at higher price points - and the market at those points remains thin.

"The issue of Google Mobile Services has no doubt galvanised Huawei," Satchu said. "I give it a maximum of 24 months before Huawei provides the market with a better operating system."

New Zealand-based Kenyan technology consultant Peter Wanyonyi said accessing apps such as WhatsApp, Facebook or TikTok requires smartphones.

"That is where the likes of Tecno have found a winning formula: they provide smartphone capability at very affordable prices," Wanyonyi said.

He said this used to be Huawei's market, but ever since it got locked out of Google's Android ecosystem, the Chinese tech giant has struggled to produce smartphones that provide access to the Android ecosystem - which is what Africa's middle class runs on.

"Without an equivalent set of devices at an affordable point from Huawei, a gap opened up in the African smartphone market - and there was a market in the gap. This is what Tecno and similar phone makers have exploited to quickly eat Huawei's lunch," Wanyonyi said.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.

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