China’s Tech Industry Expands Into the African Markets
According to McKinsey, almost half of the Chinese companies own a product especially tailored for the African customers
The African continent is currently targeted by the Chinese technology producers, eager to offer their products and services to the countries here that lately undergo an important economic growth.
The expansion has been particularly significant during the last five years, with a strong presence in several markets. Nevertheless, the Chinese expansion in Africa began 20 years ago, with the giants ZTE and Huawei, as the companies from the East Asia boosted the continent’s telecommunications infrastructure.
Moreover, China is “the only player” in Ethiopia, where the investments equaled $3 billion during 2012. The presence is also significant in Egypt, Morocco and South Africa, as the Chinese companies offer lower costs for their products and services when compared to businesses from U.S. or Europe.
For instance, custom smart-phones fulfilling the African market requirements are being produced by Tecno, a subsidiary of Transsion Holdings company based in Hong Kong. Located in Nigeria, Tecno covers a quarter of the continent’s market and provides dual-SIM products with long battery life, resistant to dust and camera lenses adapted for dark skin, with costs raging from $50 to $100.
China-based companies are “good at spotting trends”, as they “adapt easily and come up with a product that everyone likes,” Attai Oguche from Tecno explains.
According to a recent McKinsey report, “nearly half of Chinese firms in Africa have introduced a new product or service to the local market, and more than one-third have introduced a new technology,” while helping increase the innovation market on the continent.
On the other hand, companies such as StarTimes, both employ and train local people, particularly from Tanzania, as the company helps middle class grow.
“This focus on the local market has taken television viewing from an occasional luxury to a daily routine for many Tanzanians,” the McKinsey report adds.
More services will follow, as China Telecom Global has recently announced its collaboration with the Djibouti Data Center in order to expand the fiber cable network in East Africa, as a part of the company’s strategic expansion plan.