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SA appetite for new smartphone entrants attracts Chinese brands

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Despite smartphone subscriptions outpacing SA’s total population figure, the country remains fertile ground for new smartphone entrants, particularly those from the East.

In the last two years or so, three Chinese smartphone brands have made their devices available locally. Taiwanese consumer electronics and smartphone manufacturer HTC also alluded to plans to re-enter the South African market.

BBK Electronics-owned brands Vivo and Oppo officially established their presence in the country in December 2019 and September 2020, respectively. Chinese smartphone provider Tecno also announcedSouth African consumers will be able to purchase Tecno smartphones from major retail stores and online outlets.

Another Chinese smartphone maker looking to make inroads in SA is Xiaomi. It entered the local market six years ago, through distributors.

Thecla Mbongue, senior research analyst for Middle East and Africa at global research and consultancy firm Omdia, says there is appetite in SA for all these new entrants, especially in the lower segments, where pricing matters as much as, or more than, brand.

“All Chinese devices should not be necessarily labelled as low-cost. Huawei devices are a good example of a Chinese manufacturer catering for all ranges. However, most of the new entrants essentially first compete on price in order to gain market share.”

According to Mbongue, another advantage to the increase in players is that it fuels competition and puts pressure on other brands, especially the best known ones, to further segment their offerings in terms of pricing and features.

“At the same time, the influx of more affordable smartphones drives up smartphone penetration and internet and data connectivity.”

Aside from the Chinese smartphone brands, Mbongue believes there “surely” will be other smartphone manufacturers making their devices available locally. “New brands regularly emerge, and South Africa is a key emerging market targeted by manufacturers.”

Thecla Mbongue, senior research analyst for Middle East and Africa at Omdia.
Thecla Mbongue, senior research analyst for Middle East and Africa at Omdia.

According to Nicola Nell, marketing manager for Xiaomi in SA, the company last year established a dedicated team, earmarking SA as a “level one strategic growth priority”.

Nell tells ITWeb that Xiaomi fans were “excited” by the recent launch of the Redmi Note 10 Series.

“Xiaomi is currently selling a total of five different smartphones in the South African market, with four more devices launching in the next few months. These can be purchased through Vodacom channels on prepaid and postpaid, and various distributors on prepaid.”

Nell says entry-level devices retail for R1 799, while the Redmi Note 10 Pro retails for R5 499.

The smartphone brand counts fellow Android players in the local market as its competitors. “Xiaomi plans to set itself apart from these competitors by continuing to introduce similarly-spec'd devices into South Africa at price points that influence purchase decisions.

“Xiaomi is currently the world’s number two smartphone manufacturer, and their product shipments into Africa increased by over 150% in Q2 2021. This is part of their strategic intent to make affordable smart technology more accessible, by partnering with mobile operators and retailers across the company.”

Nicola Nell, marketing manager for Xiaomi in SA.
Nicola Nell, marketing manager for Xiaomi in SA.

For Tecno, which entered the market in 2019, there has been compelling uptake from local consumers, it says.

In addition, there is “strong demand” in the semi-urban and middle-class markets, which it says are generally overlooked by larger competitors.

According to Tecno, in SA, it is focusing on the R1 500 to R4 000 price band, and is looking to bring high-end devices to the market.

“Tecno is focusing on challenging the mid-to-high tier market. Our vision is to benefit the masses with advanced technologies and stylish designs.

“Tecno always strives to better our product offerings and end-user experience. We compete with any brand that is committed to benefitting the mass consumer market by marrying cost-efficiency with superior technology.”

The brand says its devices are sold via various retail channels, such as TFG, Game, MRP, PEP and Ackermans.

Oppo SA head of marketing Avashnee Moodley says the brand has sold more than 100 000 devices in the country.

“Coming into South Africa, we had to have a unique understanding of the climate around technology, business and lifestyle. We initially launched (in September) with our mid-tier devices, which are more affordable options.

“As South Africans began to interact with the brand, we started to see huge shifts towards our devices, given the excellent craftsmanship and state of the art technology available at price points that worked for the everyday citizen.

“In March this year, we launched our first premium device locally − the Reno 5G − and this helped grow not only our product catalogue but our audience.”

Moodley describes Oppo’s growth as fast, adding that it holds steady. “We are in the top four smartphone brands sold in two of the market’s largest operators.”

She notes the brand has five smartphone models available, with more coming soon.

Oppo’s A-series starts at R2 999 and goes up to R7 999, while the Reno series retails for R14 999.

Avashnee Moodley, head of marketing at Oppo SA.
Avashnee Moodley, head of marketing at Oppo SA.
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