A recent recruitment indicates that the “king of mobile phones in Africa” Transsion will once again try cross-border e-commerce in Africa.
According to the recruitment, Shenzhen Asia-Africa Technology Co., Ltd. was established in March 2021. It was jointly funded and established by Shenzhen Weihua Network Technology, the largest independent website seller in China, and Transsion Holdings, the king of mobile phones in Africa. Now it is engaged in the cross-border e-commerce business for mainstream African countries. The company is now based in Nigeria, Uganda, Kenya, Ghana, Morocco and other countries and is rapidly expanding its territory. It aims to provide consumers in the country with high-quality consumer products that meet multiple types of life scenarios. The company’s business model is mainly independent stations and shopping malls, and mobile apps. The current product direction is mainly 3C digital, small home appliances, clothing, beauty, household daily use and other products.
At present, the company is recruiting a large number of Chinese and high-quality suppliers with e-commerce, the payment experience, and permanent residence in Africa. The positions involved include 50 overseas investment experts, 5 to 10 overseas payment experts, 20 overseas quality control experts and 20 customer service experts.
This is not the first time Transsion has tested cross-border e-commerce. In Egypt, Infinix, a sub-brand of Transsion, launched XMall, an online shopping platform focusing on 3C products. In addition, TRANSSION has also built a platform XPark, which mainly sells Transsion products online.
In fact, as early as October 2018, there were media reports that NetEase and TRANSSION’s joint venture company Transsnet began to prepare for the e-commerce business in Africa and updated relevant recruitment trends at that time.
However, Transsion didn’t seem to increase e-commerce related business later. Entering 2020, the voice of whether TRANSSION will expand its e-commerce business has revived. According to previous reports, in March 2020, at the beginning of the pandemic, Yi Jinfu was also considering using the pandemic dividend to develop e-commerce business, but the CEO believed that it did not meet the company’s original strategy and did not approve it.
All signs show that, in front of the ceiling of the mobile phone business, Transsion has already begun to try more possibilities. In 2015, TRANSSION’s home appliance brand Syinix was formally established, and in the same period began to deploy Internet business in Africa. At the beginning of 2019, it was rumored in the industry to launch Internet TV in Africa under the brand Infinix. The operator was Zhang Zhiwei, the original CEO of LeEco.
Just like Xiaomi’s Internet format built around MIUI, TRANSSION, which started with mobile phones, is making every effort to build a software and hardware integrated ecosystem in Africa. An industry veteran pointed out that TRANSSION’s mobile phone has encountered a bottleneck in its development and intends to expand new businesses. The idea is to be an “Africa’s Xiaomi”. Some people in the industry believe that “Transsion’s future growth depends on the growth of mobile phones in the short-term, home appliances and accessories business in the medium-term, and the Internet in the long-term.”
However, the creation of the Internet business format is not just as simple as building a platform. The payment ecology, supply chain system and express logistics surrounding it are all links that need to be opened up. In addition to launching hardware products and shopping platforms, Transsion is also committed to building a local payment ecosystem in Africa. In November 2019, TRANSSION raised US$40 million for PalmPay, a Nigerian financial technology company, and officially launched its online payment service. At that time, the PalmPay payment application software was expected to be loaded on thousands of TRANSSION mobile phones.
A brokerage analyst pointed out that TRANSSION’s strategy is to combine existing mobile channels for secondary output. It is understood that convenient and effective local logistics cannot be formed locally in Africa. International logistics companies such as DHL and TNT are expensive, and e-commerce development is struggling. “In fact, the volume of these products is still very small, because the African market does have limited purchasing power, and Transsion basically only earns money for hardware. At this stage, it may not be appropriate to compare it to ‘African Xiaomi’.”
However, in recent years, the online retail industry in Africa has been growing rapidly. It is predicted that this trend will continue. Among them, Africa has the youngest and second-largest population in the world. Therefore, there may be a huge digital audience. In addition, due to the widespread expansion of smartphones and mobile devices, Internet penetration has been on the rise.
It is worth noting that Africa, with a population of 1.2 billion, is not a blank area for e-commerce. In Nigeria, South Africa, Kenya, Morocco, and Egypt, the largest economies on the African continent, online retail is booming. Jumia and Konga, the online shopping platforms headquartered in Nigeria, have become the most popular online shopping platforms in Africa.
According to a report by the research institute Statista, Jumia online shopping ranks first in Nigeria and Kenya. Souq.com is the dominant player in Egypt, which is an Amazon company and the largest e-commerce platform in Arabic-speaking countries. In South Africa, takealot website dominates its online shopping market, while the Chinese fast fashion brand SHEIN is the most popular fashion shopping app.
However, there is still a lot of room for development in the African e-commerce market. A research report by China-Africa Venture Capital Incubator Feicheng Innovation shows that by 2020, the revenue of the e-commerce market is expected to reach 19.857 billion U.S. dollars, with a compound annual growth rate of 15.5% from 2020 to 2025, and the estimated market size by 2025 40.758 billion U.S. dollars.
The United Nations Conference on Trade and Development reports that since 2014, the number of online shoppers in Africa has grown by 18% every year. Over the past ten years, the rapid spread of the Internet and smartphones has greatly promoted the growth of e-commerce in Africa.
And Transsion itself is the driving force of this process.
Source: Zhixiang