Transsion Holdings, a Chinese company, is renowned for its smartphones, sold exclusively in African markets under brands like Tecno, Itel, and Infinix. In the third quarter of 2023, Transsion overtook Vivo to become the fifth-largest global mobile phone shipper, with a global market share of 8.6% and an impressive 40% share in Africa.
However, Transsion’s influence extends beyond smartphones, offering valuable insights into the future of Chinese investment in Africa and lessons for other foreign investors aiming for success on the continent.
Key to Transsion’s success was its strategic decision to avoid the highly competitive domestic Chinese market, instead focusing on Africa. By leveraging its expertise in feature phones and China’s supply chain advantages, Transsion tailored its products specifically for African consumers. Notable innovations include phones with a “four-card, four-standby” feature, allowing users to switch SIM cards when one loses signal, and facial recognition algorithms optimized for African facial features, enhancing photo quality for users. This keen understanding of local needs has been central to Transsion’s growth.
Expanding its product offerings, Transsion has recently introduced the “swallow maker” under its premium home appliance brand, Syinix. This groundbreaking device, developed over two years through extensive research in over 10 African countries, is the world’s first electric machine designed to cook various types of swallow food, a staple across Africa and India. This product, akin to a rice cooker in its cultural significance, is poised to become a pan-African kitchen essential, especially in light of the African Continental Free Trade Area, which promotes zero tariffs across borders.
Transsion’s impact is also seen through Boomplay, a music streaming service with 98 million monthly users in Africa, surpassing Spotify’s 75.5 million. Boomplay’s success stems from its strong local presence, with offices in multiple African countries, double the number of Spotify’s offices in the region. By focusing on tailored content and innovative strategies like direct licensing agreements with major music labels and integrating Boomplay with Transsion phones, the platform has achieved market dominance.
While other multinational companies have recently struggled or withdrawn from African markets—citing challenges like competition with low-cost rivals and economic downturns—Asian companies like Transsion are thriving. Their success is attributed to a deeper understanding of local markets and a focus on resilience, as opposed to simply maximizing profits and repatriating earnings.
Chinese investment in Africa has surged over the last two decades, with Chinese FDI stocks growing from $490 million in 2003 to $40.9 billion in 2022, making China Africa’s fifth-largest investor. Although some challenges remain, particularly in meeting Africa’s needs for job creation and industrialization, companies like Transsion are paving the way. To truly succeed, more Chinese and global firms must follow suit by establishing manufacturing operations in Africa, fostering job creation, and supporting technology transfer.
The upcoming FOCAC9 in Beijing presents an opportunity for China to deepen its investments in Africa. Expanding initiatives like those of Transsion and Hisense—who opened a home appliance factory in South Africa in 2013, employing over a thousand people—could be key to driving Africa’s industrialization and economic growth, aligning with the African Union’s Agenda 2063. This localized approach, creating products tailored to Africa’s young and growing middle class, offers a more sustainable path to success than the strategies used by previous foreign investors.
