'African mobile phone market champion' China Carriern also hits hard in IT field

　China's Transon, which boasts an overwhelming share of the African mobile phone market by localizing products in the African market and ultra-low prices.

　According to the financial results for fiscal year 2021 and the first quarter of last year released on April 27, Duanyin HD's operating revenue in Q1 this year was 11.055 billion yuan, down 1.75% year-on-year. 796 million yuan, down 0.7% year-on-year.

　 Although the company is headquartered in Guangdong and Shenzhen, it has quietly made a fortune overseas and established a foothold in the African market with conventional mobile phones, avoiding competition in the Chinese domestic mobile phone market. After listing the company's A shares in China, the success of its localization strategy in the African market, such as the "beautiful black photography function" and "quadruple SIM card slot", has been talked about in China.

　Armed with its market foothold and localization capabilities, Transon leads the transformation of the African mobile phone market into smartphones. Huanyin has a 47% share of the African smartphone market, far ahead of second-placed Samsung at 20%.

　However, it appears that Transphonyin is not satisfied with the status quo, and is looking to follow in the footsteps of mobile phone hardware with the Internet industry. I will tell you based on the article of "Phoenix Network Technology" in China.

Index

• 1 Expanding into the South Asian market and home appliances
• 2 The history and challenges of the African consumer electronics market
• 3Entering the music distribution service with the experience of partnering with a major Chinese company
• 4 Spotify, Apple Music have a chance in the market where it does not spread?
• 5 Reinforcing the Internet business by joining Baidu talent
• 6 general comments

Expanding business to the South Asian market and home appliances

　 Transon's performance is strongly linked to its performance in the African market. In the fourth quarter of last year, shipments of smartphones in the African market decreased by 7% year-on-year, but shipments of Trans-On were almost the same.

　Looking at the performance in 2021, Denon's grades are reasonably stable. Operating income was 49.412 billion yuan, up 30.75% year-on-year, and net profit attributable to shareholders was 3.909 billion yuan, up 45.52% year-on-year. However, looking at the revenue structure, most of the growth is in markets other than Africa, and it seems that operating revenues from operations in Asia are already higher than in African markets. Huanyin is particularly aggressive in the South Asian market. Pakistan ranks first with over 40% smartphone market share, Bangladesh ranks second with 20.1%, and India ranks sixth with 7.1%.

　The global mobile phone market has entered an era of saturation, and fierce competition is unfolding even in fast-growing emerging markets. Xiaomi and OPPO have also started to enter the African market, while Chuan Yin has also started fighting with Chinese forces in Pakistan and India.

　With the mobile phone market nearing its peak, Transponsion is also focusing on other hardware. Established Oraimo, a digital accessory brand in 2014, and Syinix, a middle-range and high-end home appliance brand in 2015. Adopted a multi-brand strategy in the home appliance business from 2019, newly established entry-level home appliance brands itel and Infinix, and prepared for smart TV business. We are.

　Like mobile phones, the majority of Denon's home appliances also sell high cost performance, expanding the market with low prices. Continued localization innovation in terms of product strength. For example, since the voltage in Africa is not stable, he has an air conditioner that supports 179V-265V, and he has a refrigerator with a cold water purifier to cope with the heat wave in Africa.

The history and challenges of the African consumer electronics market

　The African consumer electronics market has undergone two major brand changes so far. At first, from the 1990s to around 2010, Korean manufacturers held 80% of the high cost performance market. From around 2010 to 2017, Chinese companies such as Kaisei, TCL, Midea, and Sowei embarked on overseas expansion, and they also pushed Korean manufacturers to about 10% of the market with high cost performance tactics.

　However, many Chinese manufacturers did not attach much importance to the African market and did not follow the high cost performance route, so Chinese manufacturers did not succeed in occupying the African market, resulting in a situation of rivalry. The market share of Chinese brands in Africa is only 15%, Samsung, LG and Sony have a total of 10%, and the remaining 70% are local small and medium-sized manufacturers.

　In terms of supply chains, except for Egypt, South Africa, and Nigeria, which are relatively economically developed and have relatively stable macroeconomic market environments, most African countries' home appliance manufacturing industries are underdeveloped due to a lack of upstream raw material suppliers. This is also a difficult problem faced when entering the consumer electronics field.

　According to the earnings report, the other segment, which includes home appliances, grew slightly in 2021, but still accounted for 4.7% of operating revenue. Given that African countries as a whole do not have sufficient infrastructure and the supply chain is not complete, it seems unlikely that Denon's home appliance business will develop remarkably in a short period of time.  Based on the development experience of Chinese enterprises, Transphony has begun to focus not only on home appliances, but also on software.

Entering the music distribution service with the experience of partnering with a major Chinese company

　Based on the preference of African users, who are said to be “black people take rhythm even when breathing,” Denon positions the music app “Boomplay” as an important point of entry. Over 100,000 downloads in 3 months.　At first, the inexperienced Transon Yin co-founded the company with NetEase.

(Bits of knowledge: In the Chinese market, music streaming services such as NetEase, Tencent, and Alibaba are competing for "exclusive distribution", and Tencent is dominant, NetEase is inferior, and Alibaba is withdrawing. Recently, the Chinese government However, the monopoly contract was banned in principle.)　Boomplay's business model is basically free for streaming and downloading, monetized with advertisements, and paid users do not receive advertisements. Contributed by providing official music and distributing licensing fees to African musicians.

Spotify, Apple Music have a chance in the market where it does not spread?

　Although music streaming in Africa is still in the development stage, it is said that it will be a "gambling" for companies. The market is a piracy heaven (China is now cracking down like shit), the infrastructure is weak, the packet unit price is very high, and the average person with low income is a considerable burden.This is Spotify, Apple. It is said to be the key to winning over Music.

　Africa is still a blue ocean market with internet blank areas, but even where there is internet, the speed is unstable or the fee is high, so streaming services are positioned as a luxury item for many people.

　Large global services appear to be struggling to adapt to the African market. Spotify has launched a family discount plan in South Africa for $5.35 per month for 6 accounts, but even that seems too expensive for the majority of African users.

　At present, Boomplay of Denon is the number one in the African market with 210 million users and 68 million monthly active users. Although there are many users, monetization is still halfway through. According to Boomolay executives, the penetration rate of online payments in Africa is still low, and the countermeasures against piracy have not progressed yet.

Reinforcement of Internet business by joining Baidu talent

　In addition to Boomplay, Transong Yin has 30 million daily active users, “African TikTok” Vskit, competing with the original TikTok. In addition, Denon also operates a portable site, Scooper, and releases the browser Phoenix in partnership with Tencent. In these two areas, however, Chinese company Kunlun Wanwei's Opera and Opera News appear to have the bulk of the market.

　The number of accesses and channels are building up, but we haven't been able to monetize it yet. Cinda Securities forecast that in the three quarters of last year, the operating income of the mobile Internet business in Africa was 130 million yuan, less than 1% of the total revenue.

　In order to help solve the problem of software monetization, in January this year, Baidu invited the former senior vice president of Baidu to become the president of the mobile Internet business. In March, the mobile Internet business was positioned as one of the Denon Group's three major strategies. According to the financial results report, last year, the operating income of the mobile Internet business was 510 million yuan, but the proportion of advertising revenue was only 16%.

Overall review

　Not satisfied with being the “King of the African mobile phone market,” China Chuan Yin is making new moves one after another in the South Asian mobile phone market, the African Internet market, and music distribution.

　In the future, it was whispered that if Xiaomi and OPPO's development in the African market progressed, they would not be able to compete with their development technology.