In late March, Shenzhen-based phone vendor Transsion filed its prospectus with the Shanghai Stock Exchange (SSE) for an initial public offering.
The company aims to raise at least RMB 3.01 billion (USD 80 million). In response, the SSE asked the smartphone maker to share details about its growth potential in the next three years on the African continent and in India, where Xiaomi and Huawei are making strides.
IDC data shows that globally, Transsion, ranks fourth in phone shipments with 133.1 million units, which include both feature phones and smartphones. Huawei ranks third with 206 million units and Xiaomi ranks fifth with 122.5 million units. South Korean smartphone maker Samsung still leads the pack.
While China is the main market for both Xiaomi and Huawei, Transsion is little known in its home country. It dominated the African continent long before the arrival of Xiaomi and Huawei there, with its cheap feature phones, which have almost died out in China, and with a smartphone series with photo software that’s attuned to darker skin tones.
In its IPO prospectus, Transsion indicates that its market share in Africa increased from 33.7% in 2016 to 48.7% in 2018. Over these three years, Huawei’s market share dropped from 4% to 2.7% and then up again to 4.1%. Xiaomi wasn’t among the top ten phone brands on the continent.
In the African continent, frontrunner Transsion is keeping Xiaomi and Huawei at a distance, but in India, the story looks different. Xiaomi has overtaken it there.
Transsion entered India in the first half of 2016. According to the prospectus, its market share reached 3.4% by the end of that year and grew to 6.72% two years later. Xiaomi’s market share, however, increased from 2.9% in 2016 to 12.71% in 2018, making it the top-selling Chinese brand there. In India, it’s Huawei who hasn’t managed to break into the top ten players.
In its response to the SSE, Transsion said that the expansion plans of its two rivals in Africa and India will only have a “small influence” and that it sees itself maintaining “rather high” market shares in the future.
Transsion reasons that it has an advantage in the company’s established presence in Africa and that its localized research and development systems, stable sales channels, and after-sales services for customers are assets that its competitors lack. It did not present specific plans for its strategy to gain relevance in India.
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