info.afrindex.com
China-Africa Trade Information Service
info.afrindex.com
China-Africa Trade Information Service
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77% of all Africans are under 35 years of age. Many people now use smartphones. Chinese suppliers especially benefit from economic prosperity. It is difficult for African companies entering the market to compete with Chinese prices.
The smartphone market in Africa is highly competitive, but few devices worldwide are designed with African customers in mind. This was something the Chinese company Transsion recognized early on and enabled it to become market leader on the continent over the last 10 years. According to Transsion Holdings, it has sold more than 130 million Tecno and Itel cells in Africa.
"They are exactly how smartphones need to be," says 35-year-old Lafu Balde. He bought a Transsion phone recently: "It cost only 50,000 CFA francs [€76] and has everything we need here in Africa: access to the most important social media is pre-installed, the device is robust and the battery lasts several days in standby mode. I am grateful to the Chinese for making it so easy for us to access the Internet." Transsion phones also have user menus in several African languages and usually offer space for two SIM cards. That goes down well with the customers.
Chinese cell phones also dominate the market in Senegal and Nigeria, the latter being Africa's most populous country. The same applies to the second largest market in sub-Saharan Africa, Ethiopia. Transsion was the first non-African company to introduce Amharic fonts and after-sales support in Amharic, almost 10 years ago.
A Chinese formula for success
According to information, only a few people in China are aware of the great success of "Transsion" mobile phones in Africa. The company achieved a market capitalization of around $6 billion (€5.4) on the first day it went public, four weeks ago. The company's focus on Africa began in 2008, when Transsion defined its "Focus on Africa" strategy. It met with resounding success. In 2018, the volume of cells shipped from China to Sub-Saharan Africa reached 124 million. Last year, the company's market share in Africa stood at almost 50 percent.
Africa's competitor for China
A new African manufacturer, Mara Phone, is also trying to gain a foothold in the market. According to the Rwandan government, the company is backed by Ashish Thakkar, an investor from Dubai. Rwanda's President Paul Kagame opened the first smartphone factory that produces directly in Africa in the capital, Kigali, at the start of October. A second one was inaugurated ten days later in Durban, South Africa.
"High-tech for Africa from Africa is a project that the Rwandan government has actively supported from the outset," says Clare Akamanzi, from the Rwandan state development agency RDB. According to Akamanzi currently only 13% of Rwandans own smartphones. "However, we want to push for major development in our country and promote the digital conversion," Akamanzi said.
Rwanda is making great strides in terms of digitalization. Two years ago, the public administration put an Internet platform called Irembo (gate) online, through which all citizens can digitally access public services, including via smartphones. "We have placed all kinds of applications online, for example for ID cards. It is therefore very important for us that citizens have smartphones so that they can use our online service more easily," says Akamanzi.
The challenge of recharging
Power supply is a huge problem, especially in rural areas. "My relatives in the interior of the country often have to walk several kilometers to get to the nearest power supply," Balde said.
Small home solar energy systems that are a practical solution for charging mobile phones in remote areas without electricity do exist. The Kenyan company M-Kopa sells minisolar systems primarily in Kenya, Tanzania and Uganda. They are supplied with the appropriate accessories such as buffer batteries, charging cables for all types of mobile phone connections, battery powered radios and cost-effective LED lamps. That looks like a good business model to Lafu Balde: "In remote areas of Guinea-Bissau, some people have set up their own minisolar system and make a living recharging cell phones and smartphones."
