A Tecno Mobile sign in Maiguguri, Nigeria. The Chinese handset brand is owned by Shenzen-based Transsion, which listed last week in Shanghai with a market cap of $6.5bn ©️ Bloomberg
•Companies such as Transsion are using the continent as a test bed for innovation
All over Africa, in its clogged cities and fast-changing towns and villages, buildings are painted in Tecno blue and billboards offer the allure of the Tecno brand. From the Grande Marche in Mali’s capital, Bamako, to the business hub of Nairobi in Kenya, where entire 20-storey towers are slathered in the Tecno logo, aspirational Africans are being bombarded.
What is Tecno, you may ask, if you are not a frequent traveller to the continent? Tecno is an Africa-specific brand created by Transsion, a Shenzhen-based handset manufacturer. Last week, the company, founded in 2006, listed on the Star Market, Shanghai’s Nasdaq wannabe, closing up more than 60 per cent on its first day for a market capitalisation of around $6.5bn.
The story holds lessons about Africa and its increasingly dynamic interaction with the world. Transsion, which last year sold more than 100m handsets, has proved you can make money in Africa if you work out what people want and what they can afford.
From 2008, Transsion specifically targeted the continent, skipping the crowded Chinese market to concentrate on a new frontier where the population is set to double over the next 30 years.
Starting with basic “feature” phones, Transsion developed its technological offering to cater for African tastes, gleaning intelligence from research centres established in Nigeria and Kenya.
Many Transsion phones have slots for multiple SIM cards so customers can make cheap provider-to-provider calls and bypass lapses in coverage. Battery life has been extended, vital for users in places where electricity may be intermittent. Handsets are adapted to languages including Amharic and Swahili.
As Transsion sells more smartphones, which now make up more than a third of its offering, it puts its effort on the mid-tier market, keeping the cost to around $100 for most handsets. Unusually, it also offers aftersales service.
Transsion, whose sales in Africa zoomed past those of Samsung in 2017, saw an opportunity where others did not. While the west still too often treats the continent as a charity case, many Chinese companies see a business opportunity.
True, most people in Africa are poor.
In Kenya, a relatively prosperous economy, gross domestic product per capita is still a lowly $3,000, even in purchasing parity terms. Yet the continent’s population is growing faster than any other on earth and — in its more successful economies — income per head is doubling every decade or so.
Chinese companies are getting in on the ground. In 2018, Tecno became the fifth most admired brand in Africa, according to Brand Africa, squeezed in between Coca-Cola and Puma, with Apple sixth. Itel and Infinix, its other two brands, make 17th and 26th place.
While most companies move into Africa as an afterthought, Transsion has done things in reverse, using Africa to innovate and to test the robustness of its offering. It is now selling phones in India and Latin America.
Transsion is also testing Africa as a manufacturing centre, something that could become more feasible as the African Continental Free Trade Area comes into effect. It has opened two manufacturing facilities in Ethiopia, which is pursuing an Asia-style industrial policy, in addition to factories in China, India and Bangladesh.
Together with Huawei and ZTE, Chinese equipment makers that have wired up the continent virtually single-handedly, Transsion has helped lead the African telecoms revolution. The hardware installed, China’s software developers are also coming. Alibaba has road-tested its Alipay system in South Africa and WeChat has a partnership with Kenya’s M-Pesa mobile money offering.
To be fair to western companies, some, including Vodafone, Orange and Facebook, whose WhatsApp messenger service is ubiquitous, have also seen the potential of the African consumer.
And if China has been more commercially savvy, western governments have bankrolled humanitarian schemes that Beijing would never consider. There is no Chinese Pepfar, the US President’s Emergency Plan for Aids Relief. And it was the CDC Group, part of Britain’s aid effort, that funded the M-Pesa money-transfer system on which much of the continent’s ecommerce ecosystem is built.
That ecosystem is extraordinarily inventive. Start-ups are offering services from off-grid power to farming advice, and from cut-price medicines to haulage trucks ordered up Uber-style. Jack Ma, the founder of Alibaba, has also turned his attention to Africa’s potential, launching a $1m Netpreneur prize.
When most people think of China in Africa they think of mining and construction. But things are moving on. It is no longer the highways where the main action is taking place. It is the superhighways.