Transsion brushes off risk from domestic rivals looking to expand overseas

Transsion Holdings, the largest mobile phone vendor in Africa, said it was confident that domestic competitors such as Huawei and Xiaomi wouldn’t present much of a challenge in emerging markets.

In a statement filed Monday to the Shanghai Stock Exchange in response to regulators’ risk inquiries, the Shenzhen-based mobile phone maker said Huawei and Xiaomi will barely impact its businesses in emerging markets such as Africa and India, and that it would retain market share and brand influence as the competition unfolds.

Transsion held 48.7% of Africa’s mobile phone market and 34.3% of its smartphone market in 2018, as well as 6.7% of India’s mobile phone market in the same year, according to research firm IDC. Huawei meanwhile held 9.9% share of the smartphone market in Africa, according to IDC data.

However, documents filed earlier reveal that Transsion may view rivals as more of a risk than expressed in this most recent statement. In its prospectus filed in April, Transsion cited the growing presence of rival phone makers on the African market as a risk to its business. The company filed its application to the Shanghai Stock Exchange’s new tech board on April 1, planning to raise RMB 3.3 billion (around $490 million) in its initial public offering (IPO).

Huawei entered the African smartphone market in 2011 by providing affordable smartphones via retail networks consisting of local telecom carriers. Xiaomi set up a business unit in January to expand on the African continent by cooperating with Africa’s leading e-commerce platform, Jumia.

Transsion has established a research and development system that fits local market demands, a complete after-sales service system, and stable retailing system in emerging markets, said the company in the statement. “We have built competitive barriers in emerging markets,” it added.

Transsion has been selling products in more than 70 countries in regions all over the world and has established partnerships with over 2,000 dealers, according to its prospectus.

Its online services in Africa could help it build a business ecosystem, the company said. Its Spotify-style music streaming service Boomplay has 42 million monthly active users in Africa and is now the dominant music platform in the region.

Transsion said in a statement to TechNode last month that its smartphone operating system (OS), the Android-based Transsion OS, has become a mainstream smartphone system in emerging markets. “Our mobile internet platform based on the vast amount of users and data lays the foundation for Transsion to develop the African market in the future,” said the company.