How Transsion Holdings Dominated the African Mobile Phone Industry
Transsion Holdings. Not many people know the name, but millions of Africans can identify with their main brands. Tecno and Infinix. Two of the biggest smart-phone brands by sale in Africa. They’ve also got a third mobile phone brand iTel, a digital accessory brand called Oraimo and an appliances brand called Syinix. They also have an after-sales service brand called Carl Care.
Transsion is huge in Africa and they have essentially dominated the smart-phone market here, but how did they do it? Before we dive in hit the like and consider subscribing to my channel and turning notifications on.
Brief History
You may not know it but Transsion Holding Is a relatively young company. Founded as Transsion Technology in Hong-Kong in 2006, with a focus on the development, manufacturing, sales, and services of mobile communication products. They set up shop In Africa in 2008 with their Tecno and iTel brands which were initially feature phones. Meaning java phones which came with scarcely known/used features like dual sim slots, very large batteries, TV capabilities and others.
In 2014 Transsion released its first Smart-phone in the African market and they had a really simple strategy, ‘tailoring their phones’ features to the needs of the African market’. But to do this they had to understand some of the basic challenges a lot of people in Africa faced. Which was Low spending power.
Having this in mind, Transsion focused on releasing phones that had the basic features people needed at a really affordable price. And this formula worked like a charm. Before you knew it, their fan base started growing, with avid supporters on opposing sides of the Brands Tecno and Infinix all the while not knowing both phones were sub brands of the same company. This rivalry stands till this day.
So back to how they did it. In the past, Samsung and Nokia were the mainstream brands in Africa, but their phone specifications were standardized across all markets. But Transsion defied that by rolling out products and features that addressed Africans’ pain points, thereby distinguishing their brands from the rest.
Phone Features tailored to Africans
Some phone features tailored to the African market includes:
1. Nighttime photography settings designed for darker skin tones, 2. The introduction of multiple SIM card slots for users to toggle between wireless networks in order to save money, 3. It gets really hot and humid in sub-saharan Africa, so Heat protection for electronic devices were also introduced 4. Cell Phones that have large battery capacity. In Nigeria, South Africa and Ethiopia, for example, the power supply can be unreliable, leaving people unable to charge their phones for hours, so introducing a large battery that could last two days on a single charge was very welcome. 5. Price – this was also another point the Transsion team tackled. Back in 2007 through 2012, Feature phones from their Tecno brands sold for as low as N4000 (this translates to about 66 yuan or $33 back then)
These strategies won over African consumers. And by 2018 Transsion commanded nearly 50% share of handsets shipped to the African continent. Samsung was No. 2 at a distant 10%, while HMD Global (which owns Nokia) was third at 7%.
The phenomenal performance by Transsion has given other brands insight to how lucrative the African Market is and since 2018 till date we’ve seen other smart-phone brands like Xiaomi, Umidigi, Oppo and Huawei return or set up shop in Africa.
Competition
Today the competition is rife and there’s a real struggle for market share. Samsung has upped it’s game by introducing the Budget M series and the sub-flagship A series smart-phones, Xiaomi on the other hand releases phones that are quite almost impossible to beat when you look at their spec to price ratio and Gionee is also fighting for the same market demographic as Transsions iTel, Tecno and Infinix Brands.
Transsion gained dominance by discovering the potential of Africa at a very early stage and has since invested a lot of effort in this market. This long-term commitment and know-how is practically very hard to surpass by other brands but not impossible. As a result of the growing competition, Transsion has begun moving into new territories, including Bangladesh, Pakistan, India and Southeast Asia. Essentially repeating the strategies that did it for them in Africa. However, Africa still accounts for about 80% of the bulk of Transsion total annual revenue.
New Challenge
So of late, a younger, more informed demographic of smart-phone buyers are emerging and there’s an anti-Infinix and anti-Tecno following growing in the region. Their complaints mainly are on Tecnos’ and Infinix’ refusal to introduce newer components in their smart-phones. For instance, in May 2020 Infinix released the Note 7, which was a decent phone by all accounts, but was trashed for its use of a Micro USB port in 2020. Tecno also released the Camon 15 Premiere recently and got a lot of backlash for using a two year old processor (Helio P35), also having a Micro USB Port and having a much higher price tag. There were also complaints about the bloatware found in both Tecno and Infinix phones.
With regards to the higher price tags of Transsion phones in 2020, there really is little the company can do to reduce the prices of their phones. They have got workers to pay and they have to maintain an R&D department. Introducing newer components also means the manufacturing costs go up which will in turn affect the retail price of these devices. So in their original strategy of releasing phones that African can afford, they’ve found themselves between the devil and the blue sea. Do they use newer components and increase the price tag of their phones, or do they use older components and make the phone relatively affordable? You can see how this becomes a real challenge.
A better economy and exchange rates would be really helpful in this regard. Or the willingness of the people in region to spend more for better specs
However, with the competition from other brands and with more brands gearing up to visit the sub-saharan Africa region, I think Transsion can still salvage it’s spot as the no 1 phone maker and seller on the continent. They really just need to start listening and taking feed-backs from the growing numbers of their educated and exposed customers. Cut down on bloatware, guarantee at least one major software upgrade and introduce newer components.
Will this help keep Transsion on the throne? I don’t know, only time will tell.
Comments and questions are welcome and you can follow me @henreeneo on social media to keep the discussions going.
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