More Nigerians may be sliding into poverty as the economic hardship worsens but smartphone manufacturers such as Transsion and Xiaomi are spotting opportunities to serve a mass market.
The two manufacturers account for 85 percent of the smartphone shipments into Nigeria in the third quarter of 2023, data from Canalys has shown.
Transsion is the manufacturer behind popular smartphone brands such as Tecno, Infinix, and itel. For many years, the company has held the largest market share in Africa where it sells most of its products through homegrown Chinese strategies that competitors such as Samsung and Apple are yet to master on the continent. Canalys said Transsion shipped 22.7 million units, translating to 22 percent annual growth.
While Transsion may not be dominating the markets in Europe and North America, its strategic focus on Africa has meant that it outsells competitors such as Samsung and Xiaomi on the continent with a market share of 48 percent, according to Canalysis. The company also dominates the accessories market with the Oraimo brand with a 21 percent share of the wearable market.
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“Distribution and support were how Transsion won in Africa, plus the multi-brand strategy is brilliant. I had the same strategy once for fintech, some people I was working with then from Egypt were vehemently against it. Their single brand is now history,” said Osaretin Victor Asemota, growth partner at AnD Ventures.
For Asemota, having multiple brands allows the company to avoid perception problems whereas one brand is like putting all the eggs in one basket.
Xiaomi’s 19 percent share putting it second in the market ahead of Samsung, is even more significant, considering that it only expanded its presence in Nigeria recently, unlike Samsung which has been in the market much longer.
Xiaomi entered the Nigerian market with the launch of Redmi Note 7 on 24 April 2019. The company’s major selling points were the battery’s longevity and the affordability of devices that could compete in the premium range. Experts suggest Xiaomi also understands the Nigerian market much better. But it could be that Xiaomi is borrowing the playbook of Transsion to expand in Nigeria.
“They knew the job that the Nigerian consumer needed to be done and they did it simpler, cheaper, and better. Two things to crack a market? Understand the target’s behaviour, how they deal with being underserved, and close the gaps.
But Samsung was in the second position as of the second quarter of 2023, according to data from IDC. Transsion, as usual, accounted for the largest share of smartphone shipments across Africa in Q2 2023, with the region contributing most to the Transsion’s entry into the top worldwide vendors for the first time. Samsung ranked second in Africa, while Xiaomi came in third.
“Looking ahead, the African smartphone market is expected to recover further in 2024, however, it is worth noting that shipments will still not surpass the level of strong performance seen in 2021,” said Ramazan Yaviz, a senior research manager at IDC. “The hardships and challenges posed by an influx of affordable outlook continue to affect the region, preventing a faster recovery. In the long term, an influx of affordable models across all brands and faster turnover from feature phones to smartphones will drive growth in the market.”
“Know what your true competition is and develop core competence to react flexibly. Xiaomi will dominate the market if they play their cards right, especially with a resurgent Huawei,” said Hunter Henshaw, an X user.
Nevertheless, some experts highlight China’s strategy for mobile which gave them the advantage over other countries in the mobile manufacturing business. Chinese companies understand these strategies and are deploying them in mobile-hungry Africa. For one, Chinese consumers did not follow the pattern of the West in going from physical shops to PCs to laptops to smartphones. They just went straight to the smartphone and didn’t bother whether they visited a website or not. Chinese mobile companies simply built smartphones that enabled their consumers in China to do everything they wanted to do on them without needing to go to other platforms. They did it affordably too.
Chinese manufacturers are also growing due to a lower labour cost producing in the most populous country in the world afford them. A cheaper labour cost means they can afford to reduce the price of their devices compared to competitors like Samsung.
A BusinessDay market research found Transsion’s devices among the cheapest in markets across Lagos, Nigeria.