Transsion mobile phones: behind 100 million units a year to dominate Africa

Speaking of mobile phones, everyone is familiar with domestic leaders Huami OV (Huawei, Xiaomi, OPPO, vivo), as well as overseas giants Apple, Samsung, and Nokia. However, there is another “hidden champion” that many people may not know. It ranks fourth in the global mobile phone sales rankings in 2020, occupying nearly half of the market share in more than 50 countries and regions on the entire African continent, and is on the domestic science and technology innovation board. Launched, the Transsion mobile phone known as the “King of African Mobile Phones”.

After Transsion went public, it has also been favored and sought after by many investors. Wind data shows that at the close of trading on January 4, 2022, Transsion Holdings closed at 160 yuan per share, which more than doubled compared to 53 yuan per share when it was just listed in September 2019.

As a mobile phone company established in 2006, in the face of a number of domestic and foreign mobile phone giants that are far superior to itself in terms of capital, technology, talents, channels, etc., why does Transsion stand out and dominate the African mobile phone market, and what are the successes behind its success? What kind of stories and twists have you experienced?

As a typical example of domestic technology brands successfully going overseas, unlike many domestic companies that mainly export products, Transsion’s going overseas is the true sense of going overseas in terms of products, brands, and business models. Against the backdrop of the steady progress of the “Belt and Road” construction and the outflow of Chinese corporate brands, it is of great significance to pay attention to and analyze Transsion’s counter-attack in Africa.

1.deep focus

Not a Chinese brand going overseas, but an African brand

2006 was the most difficult year for domestic mobile phones. Under the double squeeze of international brands such as Nokia and counterfeit mobile phones, domestic brands such as Bird, which was once known as the “fighter in mobile phones”, began to decline, and brands such as Panda and Nanfang Hi-Tech were even more difficult to find.

That is the year, Zhu Zhaojiang, the head of the overseas market of Bird Mobile, left and officially founded Transsion Mobile. After graduating from university, Zhu Zhaojiang entered the job of Bird’s mobile phone. With his outstanding ability and performance, he became the head of Bird’s sales company in just a few years, leading the overseas market expansion of Bird’s mobile phone.

Years of operation in the overseas market of mobile phones have given him a deep understanding of the overseas market, and he has more expectations for the broad prospects of Africa, the “new continent” of mobile phones. During this period, Zhu Zhaojiang went to dozens of countries and regions for investigation and research. With his keen sense of the market, he realized the huge potential of the African market.

In a sense, the voice transmission at that time was born for Africa. In the year of the company’s establishment, TRANSSION released its first mobile phone brand TECNO in Nigeria, starting TRANSSION’s journey on the African continent.

Compared with domestic mobile phone brands going overseas to gather in developed markets and emerging markets such as India, Transsion entered Africa, a virgin land that has yet to be developed. However, it was indeed difficult for the African mobile phone market at that time to attract the attention and attention of many giants.

There are more than 50 countries and regions on the African continent, and the ethnicity, language, religion, etc. are very complex, and it is not a unified market in the traditional sense. At the same time, the economic development level of African countries at that time was low and the degree of development varied greatly, and the construction of communication infrastructure such as base stations was lagging behind. It was difficult to see the momentum and value of mobile phone popularization.

Such a market is not very attractive to domestic mobile phone manufacturers, and it is also difficult to attract the real attention of overseas giants such as Nokia and Samsung. And this just gave the emerging brand Transsion a rare opportunity.

In fact, when Zhu Zhaojiang was at Bird Mobile, he had mentioned the idea and plan of developing the African market with the company’s leaders, but it was not approved by the management. Because of this, Zhu Zhaojiang, who firmly believed in his own judgment, led the team members to leave to found Transsion.

“Don’t despise the market, don’t underestimate users”, someone once attributed the success of Transsion in the African market to this. Around 2010, with the rapid progress of base station construction in African countries such as Huawei, and the wave of smartphones that gradually swept the world, the demand for mobile phones in the African market is increasing day by day. More domestic mobile phone brands and mobile phone merchants have begun to set their sights on this “new continent”, and they have also begun to attract many mobile phone merchants such as Huaqiangbei Market to sell various cost-effective mobile phones. They found that Africans’ desire for new technological products such as mobile phones at this time was comparable to medieval Europeans’ desire for silk.

At the same time, mobile phone giants including Huawei, Xiaomi, and OPPO have also entered Africa one after another. As one of the mainstream suppliers in the current African telecommunications market, Huawei actually began to deploy in the African market as early as 1996. However, the early positioning of Huawei’s communication equipment service provider and the later high brand positioning of Huawei’s mobile phones are destined to be difficult for it to become the mobile phone sales champion on the African continent.

“Huawei’s mobile phone prices are not much lower than those of European brands. They rely more on service than price to gain a competitive advantage.” An African mobile phone seller said. Similarly, the African market is only a part of the global mobile phone layout of Samsung, Nokia, Xiaomi, and OPPO, and it is a relatively unimportant part. But Africa was everything to Transsion at the time.

An employee of Transsion said frankly that the logic of Transsion was not to go overseas for a Chinese brand, but to build an overseas brand, gain insight into local user needs locally, build factories, and build a complete sales and after-sales service system as routine operations.

In fact, although TRANSSION has also begun to expand into emerging markets such as South Asia and South America outside of Africa in recent years, Africa has always been the base and “home” of TRANSSION. In the African market, starting from TECNO, Transsion has successively released mobile phone brands such as itel and Infinix, covering different market segments in Africa. In addition, various social welfare activities such as poverty alleviation and local education assistance have also been promoted simultaneously.

Arif Chowdhury, director of Transsion Holdings, said that now, people in many parts of Africa have agreed that Transsion is a responsible company. It not only actively participates in the development of mobile services, but also actively participates in the construction of local community culture.

Transsion’s efforts in Africa have also paid off handsomely. According to IDC data, Transsion’s share of the African smartphone market further increased from 36.9% in 2019 to 40% in 2020. In 2020, Transsion sold a total of 174 million mobile phones, and Transsion also ranked fourth in the global mobile phone sales list.

2.localization

those touching innovations

If it is said that focusing on Africa gives TRANSSION the characteristics and confidence to fight against domestic and foreign mobile phone giants, then achieving the ultimate localization is the key to enabling TRANSSION to break through the increasingly fierce market competition.

Different from the mobile phone giants that have been developing in the domestic and foreign markets for many years, Transsion has been deeply involved in the African market since its inception, localization is a natural and rational choice.

When traditional Chinese companies go overseas, most of them refer to exporting and selling their products overseas, and furthermore, they establish factories and sales channels locally and employ local employees. Transsion, on the other hand, completed a complete industrial chain from the establishment of factories to the construction of production, sales, and after-sales in one step.

In a sense, Transsion has become a local company in Africa. As the Deputy Minister of Industry of Ethiopia said, “Transsion is the first company in Ethiopia’s history to export its products overseas and help Ethiopia earn foreign exchange.” Of course, this will certainly win more support from the local government for Transsion .

In addition to these routine operations, Transsion has carried out extreme localization innovations in response to the needs of the African market, such as “smart tanning”, “four cards and four standbys”, and “mobile phone subwoofer”… It is precisely these that are deeply rooted in African users. The localized innovation of demand has become the trump card of TRANSSION.

When the mobile phone has a camera, selfie has become the favorite of people all over the world, but the general mobile phone selfie is not very friendly to black Africans. To this end, Transsion mobile phone combines dark-skinned image engine technology, customized Camera hardware, specially developed camera technology based on eye and teeth positioning, and enhanced exposure, coupled with “smart blackening” black technology, allowing more Africans to take pictures After taking a satisfactory selfie, even taking a selfie at night, it immediately captured the hearts of many African users.

Compared with the domestic unified market and the three mainstream operators of China Mobile, China Unicom and Telecom, there are more than 50 countries and regions in the African continent, and even the same country has a large number of operators, and the call charges between different operators are very high. Expensive, it is a relatively common phenomenon for a local African to carry three or four telephone cards in his pocket.

In order to solve this pain point of African users, TRANSSION first introduced the unique “dual-card dual-standby” model in China to Africa, and then developed the “four-card four-standby” model for the first time. One mobile phone is equipped with four card slots. Four calling cards can be placed. Once again won the favor of African users.

The Tanzanian ambassador once said that if African guys fall in love and don’t buy girls a voice-transmission phone, they may be looked down upon. From this, we can also glimpse the influence and status of Transsion mobile phones in the minds of African users.

African people love music and dancing, so TRANSSION has specially developed models such as the “Boom J8”, which turns the phone’s stereo into a subwoofer, allowing them to dance to the songs of the mobile phone even on a noisy street. Also thoughtfully equipped with a headset for the phone. It is reported that when the mobile phone was released, 18 well-known Nigerian superstars worked together for its platform, creating a huge sensational effect and a miraculous effect of crowds.

In response to problems such as frequent power outages, large temperature differences between morning and evening, and generally hot weather in some parts of Africa, Transsion has also developed low-cost high-voltage fast charging technology, ultra-long standby, new wear-resistant and sweat-resistant ceramic materials, and sweat-proof USB ports. .

Whether a mobile phone is easy to use or not depends on the hardware, and the function adaptation and ecology of the software are also very important. On the basis of gaining a large number of users and traffic in the African market, Transsion has also introduced China’s current hot software applications to Africa, and has carried out targeted development according to the characteristics of the African market and users.

At the same time, Transsion conducts secondary development based on the Android mobile phone system platform, and deeply customizes smart terminal operating systems (OS) for African consumers, including HiOS, itelOS and XOS. At present, Transsion OS has become one of the local mainstream operating systems. Focusing on OS, Transsion has also cooperated with domestic Internet giants such as Tencent and China Literature Group to conduct overseas strategic cooperation in various fields, and actively develop and incubate mobile Internet products that are suitable for local Africa.

According to data provided by Transsion, as of the first half of 2021, more than 10 self-developed and cooperatively developed applications have reached more than 10 million monthly active users, including music streaming media Boomplay, news aggregation application Scooper, mobile payment application Palmpay and Short video application Vskit, etc. Among them, Boomplay is currently the largest music streaming platform in Africa. As of September 2021, Boomplay has more than 60 million monthly active users.

Boomplay is similar to the domestic NetEase Cloud Music, Scooper is similar to the domestic headline, Palmpay is similar to the domestic Alipay, and Vskit is similar to the domestic Douyin, which is equivalent to the transmission of the domestic market-proven software applications to the African market. , and adapted to local characteristics and needs. “Transsion’s approach is equivalent to replicating the successful experience and practices of China, a highly mature market, and relying on its huge mobile phone user base to replicate the emerging market in Africa, to achieve dimensionality reduction. It is difficult to achieve success.” A technology industry analyst told a reporter from China Business News.

For the emerging mobile phone market in Africa, feature phones and mid-to-low-end smartphones are still the mainstream of the market. Hardware configuration and software application are important prerequisites for purchase, and cost-effective and affordable is the “last step” for purchase.

According to the current consumption situation in the African market, Transsion has launched mobile phone brands and products for different levels, but in terms of product pricing, they are all relatively reasonable and affordable. It is reported that the average price of products launched by Transsion in the African market is less than 1,000 yuan.

According to relevant statistics, among the mobile phones sold by Transsion, there were many cheap feature phones, and even the average price of smartphones was below 500 yuan, while the average price of Xiaomi mobile phones was 959 yuan in the same period. Easy to use and cheap, it has become the “key trick” for Transsion’s mobile phones to stand out.

3.grounded

Work hard and fight a protracted battle

Around 2010, Chinese copycats flooded into Africa one after another, making a lot of money. Transsion, on the other hand, chose to take root in Africa, “build strong villages and fight stalemates”, and cultivate channels one by one, one city and one storefront, from scratch. The network infrastructure in Africa is not yet complete, the penetration rate of e-commerce is only single digits, online sales can basically be ignored, and more rely on offline traditional dealer channels to promote.

On the one hand, TRANSSION gives channel dealers enough room for profit, and on the other hand, it helps local dealers sell through on-site guidance and unified publicity. The high profit level and good cooperation experience have enabled Transsion to establish long-term and benign cooperative relations with distributors around the world.

Transsion introduced that for key markets and key channel business customers, the company adheres to the channel sinking strategy, assigns sales specialists to maintain long-term and stable daily communication with dealers, distributors and retailers, and obtains first-hand market feedback and demand information in a timely manner. Grow together with distributors.

It is reported that Transsion has cooperated closely with more than 2,000 dealer customers in various market countries around the world to build a marketing channel with wide coverage, strong penetration and high stability. In addition, Transsion has also built a complete after-sales service network. Today, the company’s after-sales service brand Carlcare has established more than 2,000 direct or cooperative outlets around the world, and is also Africa’s largest Electronic and home appliance product service solution provider.

According to the above-mentioned local African distributors, the locals don’t care about the brand, they want more cards and more standby time, long-lasting batteries and affordable prices.

Different from these dealers’ stores that operate various brands of mobile phones and copycats, and also different from general brand sales stores, TRANSSION’s mobile phone stores feature “integration of sales and service”, with sales and service synchronised, and TRANSSION’s emphasis on service is more concept. Different from the style of copycat dealers who make a fortune and leave, Transsion aims at the full cycle of mobile phone sales, after-sales and repeat customers, and insists on long-termism.

In a market environment like Africa where profits are small and brands don’t pay much attention, the seemingly ordinary after-sales network is a “hard work” that most manufacturers are unwilling and disdain to get involved in. To build the trust of local users in the TRANSSION brand, and become the best brand endorsement and natural advertising of TRANSSION.

Unlike the current domestic Internet advertising and TV advertising, the advertising methods in many African countries are still similar to those in China at the end of the last century and the beginning of this century. Traditional forms such as wall painting, poster advertising, and FM advertising still occupy the mainstream. In the streets and alleys of Africa, whether it is a telephone pole or a fence, advertisements for the mobile phone brand of Transsion are printed everywhere. A TRANSSION employee said, “From the airport roads in Nairobi to the slums in Kampala, from the small border town of Kisii in Kenya to the tourist city of Rubevu in Rwanda, wherever there is a wall, the wall-painted advertisements of the TRANSSION mobile phone are indispensable.”

It is through these grounded methods that Transsion promotes its new products and influences the minds of local users, and the rising sales are the best proof.

According to statistics from Sinolink Securities, in 2020, the penetration rate of smart phones in Africa is only 40%, and the number of smart phones per capita is only 0.33. At the same time, as one of the fastest growing regions in the world, Africa is expected to add 1.02 billion people from 2020 to 2025. According to data from the Ministry of Industry and Information Technology, as of the end of May 2021, there were 1.608 billion mobile phone users in China. Based on China’s population of 1.41 billion, the per capita mobile phone penetration rate in China was 113.9%. The huge gap means huge potential. Africa is also known as the last mobile phone virgin land to be developed and a “billion-level blue ocean market”.

In addition to the gradual saturation of domestic and foreign markets, in 2017, China’s smartphone market shipments declined by 5% for the first time, and domestic and foreign mobile phone giants eager to expand new market space are increasing their investment in the African market. .

With the influx of giants and the siege of cities, the vast blue ocean in Africa is turning into a red ocean, and Transsion is also facing increasing competitive pressure.

At present, the way to resolve the pressure of competition, in addition to continuing to manage the base in Africa, TRANSSION has mainly adopted three strategies. The first is to learn Xiaomi’s IoT (Internet of Things) smart ecological home layout and launch a number of smart home brands. Increase revenue growth points by expanding categories, and create core explosive products and platform ecology; secondly, expand emerging markets such as South Asia, Southeast Asia, the Middle East, and South America; lastly, strengthen technical barriers to research and development. The latest data provided by Transsion shows that in 2021 Transsion invested 640 million yuan in research and development in half a year, a year-on-year increase of 50.72%.

Obviously, Transsion’s management also realized that it is difficult to compete with domestic and foreign mobile phone manufacturers by only making low-cost mobile phones that lack core technology, and let the company go further.

However, TRANSSION’s advantages and confidence are still there. This stems from TRANSSION’s preconceived and deeply rooted brand advantages in the African market, as well as the complete channels, after-sales advantages and a series of localized innovations that have been solidly laid out over the years. Perhaps there is also a real emphasis on and dependence on the African market.

“Even if friends occupy 10% of the market share, the annual shipment of 8 to 9 million units is not a large amount for Xiaomi and OPPO, and the price and profit of mobile phones in the African market are relatively low.” A TRANSSION employee said that for these manufacturers who are deploying global and brand upside, Africa still does not have a great attraction to attract them to invest a lot of resources. According to statistics, in 2020, the global shipment of Xiaomi mobile phones is 146 million units.

Today, Transsion has been the sales champion for four consecutive years in the African mobile phone market. In the first half of 2021, Transsion ranked first with 96 million mobile phone shipments. The “King of Africa” ​​is well deserved.

The success of the African market has allowed Transsion to grow rapidly in just over ten years, and was successfully listed in 2019. The company’s revenue increased from 11.6 billion yuan in 2016 to 37.8 billion yuan in 2020; while the net profit attributable to the parent increased from 671 million yuan in 2017 to 2.686 billion yuan in 2020. It can be said that the success of TRANSSION in the African market has not only achieved itself, but also brought “gospel” to the African people, and expanded more imagination space for Chinese brands to go overseas.

observe

Behind Transsion’s Counterattack

From a little-known new corporate brand to the “King of African Mobile Phones” thousands of miles away, in the past 10 years, like many Chinese brands in other fields, Transsion has written a magnificent overseas pioneering history and legend.

However, as TRANSSION insiders believe, it is impossible for TRANSSION to be the first by simply relying on localized functional innovations such as four cards and four standbys and smart tanning.

Transsion’s ability to be the first relies on China’s strong industrial chain supply and manufacturing capabilities. Under the premise that the unit price of Transsion’s functional machine is about 100 yuan, and the unit price of intelligent machine is about 500 yuan, it can still achieve a profit margin of nearly 30%, which can be seen.

Transsion’s focus and efforts in emerging markets around the world are actually behind China’s increasingly powerful technological innovation and market application capabilities in recent years, as well as decades of market experience and lessons from success and failure. In terms of Internet applications, Transsion has joined hands with domestic Internet giants, and with their rich experience and strong innovative application capabilities, combined with its deep understanding of the African market, it is almost unfavorable in the Internet field of emerging markets.

In fact, many of Transsion’s functional innovations do not have technical barriers, and many even domestic manufacturers “play the rest”. But at that time, only Transsion made these adaptive developments and innovations for the African market, and hit the pain points and touched people’s hearts.

For the African market that other brands couldn’t even look down on in the early years, Transsion not only bent down, but persisted consistently for more than ten years, demonstrating patience and respect for this emerging market with practical actions.

For more than ten years, Transsion has fully focused on emerging markets such as Africa, and continuously adjusted its products according to the needs and preferences of local consumers. “Don’t despise the market, don’t underestimate users” is considered the first rule of TRANSSION’s success. As its company mission states, “We are committed to enabling as many people as possible to enjoy the good life brought about by technology and innovation as early as possible”.

If we say that China’s complete domestic supply chain and mature market experience are the foundation and foundation of TRANSSION’s rise in Africa; respect and persistence are the secret of TRANSSION’s dominance in the African market.

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