Africa’s number one mobile phone maker, Transsion Holdings, has tendered an application to launch an initial public offering (IPO) in China — specifically, Shanghai. You would recall that sometime in October last year, we reported that the company had filed for IPO and put its plans to go public in top gear.
The latest information on this move, which comes in the wake of booming growth of the Chinese tech giant over the years, now reveals that the maker is set to become a publicly traded and owned entity, joining the ranks of fellow Chinese rivals Huawei and Xiaomi.
The company, based in Shenzhen, China, has completed a 90-day advisory phase where an investment bank reviewed its finances as well as management governance.
The date for the listing is not out yet. Though as of yet, Transsion hasn’t disclosed its funding target for the initial public offering, it seems that this listing will be propitious since the company seeks to double down on expanding its operations across the African region as it keeps competing, indefatigably, for market share.
So far, Transsion Holdings has recorded commendable success by exclusively concentrating its operations on African and South Asian mobile phone markets and specifically making handsets with locally-tailored capabilities, such as multiple SIM slots, stronger battery life as well as camera setup that is calibrated to darker skin tones.
But importantly, adopting a pricing strategy that involves selling phones at much cheaper rates than those of popular brands like Samsung, Huawei, and especially Apple, has positioned Transsion as the most preferred option for tens of millions of feature phone and smartphone users in Africa. This strategy has helped sub-brands in Transsion — Tecno, Itel, and Infinix — become ubiquitous all over the nooks and crannies of the continent over the last 10 years, a development that eventually saw the parent company surpass Samsung for Africa’s market share for the first time in 2017.
Transsion Holdings boasts the biggest market in Africa, recording 34.9 percent of smartphone sales in Q3 2018, followed by Samsung with 21.7 percent, and Huawei trailing both with 10.2 percent. Transsion shipped over 11 million smartphones to African countries in 2018, surpassing arch-rivals such as Samsung and Apple. The Chinese maker’s biggest presence currently lies in Nigeria, Kenya, and Senegal in which it has sold millions of phones with dual SIM ports.
One of the company’s major factories in Africa sits in Addis Ababa, Ethiopia, where the assembling of its smartphone components is done, and where these components are also tested and completed. Transsion has research and development (R&D) centers in Nigeria as well as Kenya. First opened in 2011, its Ethiopian factory has grown to 1,600 employees having a monthly production capacity of one million phones.
The proposed listing of Transsion Holdings comes on the heels of a directive from Xi Jinping, Chinese president, to create a new equity bourse particularly in a bid to enable tech companies in the country to locally raise capital. This will offer an alternative to stock exchanges in the global West.
The objective behind incentivizing more Chinese-based tech companies to list locally is to reverse a trend, which has seen a number of the major tech successes in China (the likes of Alibaba and others) launch IPOs outside the country.
In a related development, borrowing a leaf from Apple who is now paying more attention to its sales due to dip in sales, Transsion is designing a service portfolio. Mobile Internet Centre at Transsion, in January, introduced a new service in Nigeria, Scooper. It is, essentially, a media platform that offers content on football, technology, literature, politics, among other categories.
Apart from Scooper, the foray of the company into services with products such as Boomplay (which is a music streaming platform comparable to Apple Music), Palmsave, Palmcredit as well as Palmpay (which is an Apple Pay look-alike) has been majorly through a joint venture with the NetEase Group, called Transsnet.