In 2023, Transsion Holdings, hailed as “King of Africa,” achieved remarkable results. According to its recently published annual report, its revenue reached 62.29 billion RMB, a year-on-year increase of 33.69%. Net profit even soared to 5.53 billion RMB, marking a year-on-year growth of 122.93%, which showcases the company’s strong momentum.
Mobile phone business is an important source of income for Transsion, accounting for over 90% of the company’s total revenue. In 2023, the global shipments of mobile phones reached about 194 million units, with mobile phone business revenue alone reaching 57.34 billion RMB. In the African market, Transsion maintains a leading position, with a smartphone market share of over 40%, far ahead of its peers, especially when compared to the second-ranked Samsung, the gap is significant. Transsion also has a presence in the Pakistani and Bangladeshi markets, and holds the sixth position in the fiercely competitive Indian market.
After deep cultivation in the African market, Transsion has started to set its sights on a broader horizon to expand its business landscape. In addition to the three major mobile phone brands TECNO, itel, and Infinix, Transsion has also established the digital accessories brand oraimo, after-sales service brand Carlcare, and home appliance brand Syinix, aiming to seek more growth points. So far, Transsion’s business has expanded to over 70 countries and regions, including emerging markets such as Africa, South Asia, Southeast Asia, the Middle East, and Latin America. These markets have a combined population of over 4 billion, and the smartphone industry is not yet fully developed, offering huge growth potential for Transsion, which is known for its cost-effective products and localized strategies.
Despite the overall decline in the global mobile phone industry over the past two years and challenges faced by Transsion, the company’s global shipments in 2022 decreased by more than 40 million units year-on-year, with net profit also down 36.46%. However, in the context of sluggish growth, Transsion chose to improve the situation by entering new markets and increasing shipments. Last year, the company further penetrated the lower-tier markets of South Asia and Southeast Asia and also ventured into the mid-to-high-end market, launching the Phantom VFold foldable phone and the TECNO brand’s phone AIOS, while collaborating with third parties like Google and MediaTek.
These concerted efforts enabled Transsion to achieve a 20% year-on-year increase in shipments within half a year, allowing the company to surpass vivo for the first time and enter the top five of global smartphone shipments, and even begin to close in on OPPO, which ranks fourth. Compared to Samsung, Apple, Xiaomi, and OPPO in the same period, Transsion was the only smartphone brand to achieve growth in the second quarter. In the third and fourth quarters, Transsion made a strong recovery in its home market of Africa, with significant increases in mobile phone shipments. In the fourth quarter alone, smartphone shipments reached 28.2 million units, up 68.6% year-on-year, ranking fourth globally. In terms of performance, revenue growth in these two quarters surpassed 30% year-on-year, with net profit growth rates doubling.
While expanding markets, Transsion also focuses on enhancing profit efficiency through precise gross margin control. Over the past year, the gross profit margin of the global mobile phone business was 24.18%, up 3 percentage points from the previous year, significantly higher than Xiaomi’s 14.6%. This improvement in gross margin is due to cost control optimization in production and other areas. In recent years, Transsion adjusted its supply chain, partnering not only with major mobile phone OEMs like Huaqin, Longcheer, and Wingtech but also establishing relationships with second-tier ODM manufacturers like MobiWire and Innovatech, enhancing its bargaining power and dispersing some manufacturing costs.
In the momentum of the gradually rebounding African market, Transsion has actively increased its export volume and achieved significant growth in both revenue and net profit through internal cost control. Despite its certain achievements in Africa, Transsion’s ambition to expand is still unsatisfied. The company is shifting its focus from the distant African market to the more competitive Asian market, as well as the Middle East and Latin American markets, which are highly favored by major enterprises.
According to Transsion’s announcements, the company’s market share in India has climbed to the sixth position. While the achievements brought about by market growth are encouraging, the Indian market has become more pronounced due to trade protection policies, and its market stability may not be as optimistic as expected. As early as around 2014, Xiaomi, Vivo, and OPPO entered the Indian market and dominated the market along with Samsung. Canalys data shows that by 2023, Samsung, Vivo, and Xiaomi still hold the top three spots, with Samsung leading at 19% market share.
Beyond these leading brands, foreign smartphone manufacturers operating in India also face government obstacles and suppression. For instance, in 2022, the Indian government imposed a fine of 6.53 billion rupees (approximately 560 million RMB) on Xiaomi and subsequently froze about 4.8 billion rupees of its bank funds. Companies like Vivo, OPPO, and Transsion have also been accused of tax evasion and avoidance, and were forced to pay hefty taxes and fines. In addition to the incurred fine costs, Transsion may also face the risk of its core-priced products being banned from the Indian market. Reports suggest that India plans to limit the sale of Chinese smartphones priced below 12,000 rupees (approximately 150 USD), and many models under Transsion fall within this range. If this plan is implemented, Transsion’s sales in India could be severely impacted.
Unlike the challenging situation in India, the Latin American market seems more conducive to Transsion’s long-term development and in-depth cultivation. Currently, the Latin American market is at the transition stage from feature phones to smartphones, which is a tremendous opportunity for Transsion. In Africa, Transsion has already accumulated rich production and sales experience. Faced with issues like unstable power supply, poor network signals, and high data costs, Transsion has developed a range of technologies that meet local market needs, such as data saving, weak network connection solutions, memory integration technology, localized voice recognition for minor languages, and screen display color research for different skin tone customer groups.
By 2023, with its strategic layout in core Latin American markets such as Chile, Mexico, and Peru, Transsion achieved a 159% annual growth rate, in line with the overall recovery trend of the Latin American mobile phone market. Meanwhile, in the Middle Eastern market, Transsion competes with Xiaomi for the mid-low-end market share and is gradually attempting to advance into the mid-high-end market dominated by Samsung and Apple. According to Canalys data, the mobile phone shipment volume in the Middle East also achieved year-over-year growth last year, with Samsung and Apple capturing 34% of the market share and over 90% of the high-end mobile phone market share, respectively, followed by Transsion and Xiaomi, which mainly sell mid-low-priced phones.
Overall, Latin America and the Middle East have become recognized as emerging markets by Chinese smartphone manufacturers. Having built up sufficient strength in the African market, Transsion is gearing up for more intense competition with established global smartphone manufacturers in these new markets.
