What Transsion tells us about Chinese investment in Africa

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2024-08-29 11:30:02

The Chinese firm Transsion Holdings is most well-known for smartphones only sold in African countries, including brand names Tecno, Itel and Infinix. Due to these brands, in the third quarter of 2023, Transsion surpassed Vivo to claim the fifth spot globally in mobile phone shipments, with its global market share reaching 8.6% and an African market share of around 40%.

But Transsion’s story is deeper than smartphones, and its story provides invaluable insights around the likely shape of Chinese foreign investment in Africa going forwards as well as lessons for other foreign investors looking to succeed in Africa.

Crucial to Transsion’s initial success was its ability to adapt to the ever-evolving dynamics of the global mobile phone landscape. Steering clear of the highly competitive domestic market, Transsion positioned itself strategically in Africa, leveraging its familiarity with feature phone products and combining it with China’s supply chain advantages to win in Africa.

Transsion developed and then made assembled-in-Africa phones with features tailored for the African market, such as a “four-card, four-standby” design, allowing users to switch to another SIM card when one has no signal. Additionally, Transsion created facial recognition algorithms based on African facial data, ensuring better photo quality for African users. This attention to local needs was a key driver of Transsion’s success.