Chinese technology companies have begun to expand in the less-developed continent of Africa, where several countries are looking for better economic growth.
Chinese companies have started their expansion into Africa over the past four to five years, with various analysts confirming that. Moreover, China was also leading in technological developments in Ethiopia, with the investment in that sector going upto $3 billion as of 2012.
Moreover, China’s expansion is not only limited to the lower-developed areas in East Africa, but the Chinese companies have expanded into countries north as well including Egypt and Morocco, and going south into South Africa.
Analysts confirm that the success of Chinese companies is based upon their cheaper pricing strategy, as compared to their U.S and European competitors in African markets.
The expansion of Chinese companies into the continent of Africa began, when telecommunications giant ZTE began its operations in Africa, before Huawei entered the African market, offering pretty similar services.
Moreover, the establishment of these multinational giants developed the infrastructure in Africa’s telecommunications sector, with both these firms working with local African companies, institutions and the local government.
The innovation introduced by Chinese companies is also notable, with almost half of Chinese firms having introduced a new product or service to the local African market, with more than one-third firms introducing new technology.
Hong Kong’s smartphone maker, Tecno, has followed the path of other Chinese companies on their successful business ventures in the African continent.
Tecno, which has a regional base in Nigeria, have released handsets with practical innovations for the under-developed African markets.
Among these innovations were long battery life, with power sources difficult to find during daily routine. Moreover, the dust-resistant screens and cameras adapted for darker complexions have been amongst these innovations. On top of these innovations, the friendly pricing have also led to the expansion of such companies in Africa, with a handset costing only $50-$100 in Africa.
Tecno, whose parent company Transsion Holdings revealed, that its accumulated brands now hold more than 40% market share in Sub-Saharan Africa. Moreover, Transsion Holding has witnessed record sales, with sales of more than 246 million dual-sim handsets.
Moreover, Tecno has a 25% market share in Africa’s total market for smartphones.
An deputy marketing manager for Tecno has revealed that the success of Chinese companies is mainly due to their ability of spotting trends, and adapting quickly to come up with a product to meet the consumer demands.
Moreover, conservative approach from European companies mean that the Chinese companies will be ahead of their European competitors.
Chinese companies have now expanded into various African markets including broadcasting networks, data centers and smartphone.
A prominent Chinese broadcaster include StarTimes, a firm, that has adopted the strategy of going in cheap and then expanding their business later.
StarTimes has employed local Africans cheaply and trained them, while increasing its viewership, and the company has also invested funds in local and international programming. Its’ particular success has come in Tanzania, a report confirmed.
StarTimes has focused on the local market, and has transformed the Tanzanian standard of living. Television viewing was once considered an occasional luxury for Tanzanians, but with StarTimes’ low prices, it has become a daily routine for many locals, instantly capturing the middle-class market of Tanzania.
Chinese developments in Africa also include formalizing One Belt, One Road development projects which encourages mainland interest in the African continent.
Last year, China Telecom Global also announced that it would collaberate with Djibouti Data Center, and expand its network and encourage the expansion of fiber cable services in East Africa.