Chinese phone makers get smart in Africa

Africa's youthful population is proving to be a ripe market

Chinese mobile phone makers are stepping up their efforts to localize their products for the African market, setting up local production lines and pouring resources into research and development that has the continent's customers as its focus.

Even though the image of Chinese electronics manufacturers has been tarnished by so-called shanzhai goods, or fakes, in Africa, Chinese-brand mobile phones have been hugely successful in the continent.

Africa, with its youthful population and growing middle class, is widely seen as holding out huge market potential, after China and India, for the world's mobile phone manufacturers.

ZTE, the Chinese telecommunications equipment and network multinational, entered Africa more than 10 years ago. The company sells older-style, basic mobile phones, smartphones and mobile broadband in Africa.

ZTE says that its sales of smartphones in the continent rose fivefold last year. It has 10 percent of the smartphone market in South Africa, it says, and is among the top three brands in the prepaid smartphone market there.

Lyu Qianhao, director of ZTE's African branch, attributes ZTE's success in Africa to the effort it has put into localizing its products, drawing on its global research and development resources.

"ZTE set up research and development centers in the US and Europe, and as we picked up advanced design know-how there, we tried to put that into our product for Africa.

"We also have a special research and development team for Africa and the Middle East. This team has been supporting that market for years and has a great deal of experience."

The company has also done a lot of consumer research through various channels, including mobile operators, local marketing personnel and exhibitions, he says.

The products ZTE has marketed specifically for Africa include mobile phones that are dustproof and resistant to high temperatures.

"As demand in Africa changes, we will continue to offer new products to promote our localization," Lyu says.

"We built a factory in Africa with the aim of completing our industry chain. We are making every effort to offer Africans highly cost-effective, top-quality smartphones in China that perform well."

ZTE installs software, including WeChat and Facebook applications in the smartphones it sells.

"Our aim is to provide ZTE smartphones to people from every African country, giving them access to communicate with the whole world through smartphones," Lyu says.

The African and Middle East mobile phone market is the fastest growing one in the world. Last year, 174 million mobile phones were shipped in the market, 2.6 percent higher than in 2013. The number is projected to reach 227 million sets in 2020.

The smartphone market in Africa also grew rapidly last year, 82.8 million being shipped, 56 percent more than in 2013. Smartphones accounted for 48 percent of those shipments, and that is forecast to rise to 75 percent in 2020.

Lyu says the low penetration rate of smartphones in Africa, the stable political environment, continuing economic growth and increasing investment in infrastructure construction mean the market has huge potential.

"Though the upheavals in North Africa in 2010 had a chain effect on sub-Saharan Africa, resulting in the biggest ever potential risk to Chinese mobile phone manufacturers, there is no doubt about the trend: The mobile phone market in Africa will develop sustainably.

"The market penetration rate of smartphones in Middle East and Africa was only 11.9 percent last year. The potential for more growth is immense. It will reach 40.7 percent in 2020. After China and India, Africa will be the next battlefield for mobile platform providers and mobile phone makers."

Thomas Verryn, research manager for sub-Saharan Africa for Euromonitor International, says the home appliances and electronics market in the region is dominated by huge sales of mobile phones.

"For each refrigerator sold in sub-Saharan Africa, customers buy two TVs and 34 smartphones."

However, this holds the promise of growing sales of other types of electronic goods, he says.

houliqiang@chinadaily.com

(China Daily Africa Weekly 04/03/2015 page7)