Setting The Pace In Africa's Phone Market

Chinese unknown Transsion sells 3 in 10 phones on the continent. The flip side: Threats of civil war

- Lulu Chen

No matter how many phones you sell, Yu Weiguo has learned, it’s tough to keep to a schedule when the government declares martial law. During his eight years in Ethiopia, Yu has helped turn little known Transsion Holdings, owner of the sleepy Chinese brand Tecno Mobile, into Africa’s leading mobile device maker. Having sold at least 200 million phones on the continent, he picked the outskirts of Addis Ababa, Ethiopia’s capital, as the site for a 280,000-square-foot factory. It was supposed to be pumping out as many as 2 million phones a month by July, but things aren’t working out as planned.

Ethiopia’s ruling coalition declared a state of emergency in mid-February after the surprise resignation of Prime Minister Hailemariam Desalegn destabilised the rest of the autocratic regime. For Transsion, the fallout has been a lesson in risk. The company profits from China’s checkbook diplomacy in Africa but now faces the downside: public outcry against worsening inequality and repression. “There are many things that can’t be controlled in Africa,” Yu says. “Sometimes your plans don’t work.”

To say Transsion and its phones are little-known outside Africa is an understatement. Tecno has never cracked the top-10 smart phone brands in China and doesn’t sell in the U.S. or Europe. Yet its parent accounts for 30 percent of African phone sales, compared with 22 percent for second-place Samsung, according to researcher Canalys. Reclusive founder Zhu Zhaojiang controls the private company via a string of related backers and funds, as well as some government-backed investment. Zhu, 44, has said he plans to go public at some point through a reverse merger with Shimge Pump Industry Group, a Chinese manufacturer of stainless steel pumps.