Shenzhen-based Chinese telecom company Transsion, known for its three brands TECNO, itel, and Infinix, has made a remarkable comeback in the second quarter of the year, reporting robust revenue and profit growth after five consecutive quarters of decline. Despite facing challenges in the global smartphone market, Transsion’s strategic focus on Africa and expansion into South and Southeast Asia have paid off.
According to the company’s preannouncement on Wednesday, Transsion’s Q2 revenue surged by an impressive 30.7 percent year over year, reaching 15.8 billion yuan (US$2.2 billion). Profits witnessed a remarkable turnaround, doubling from the previous quarter to 1.6 billion yuan, an astounding 83 percent increase compared to the same period last year.
The growth momentum was not limited to just the second quarter. During the first half of the year, Transsion reported a healthy 8 percent increase in total revenue, amounting to 25 billion yuan, while profits experienced a substantial 27 percent rise, reaching 2.1 billion yuan.
Transsion attributes its impressive revenue growth to two key factors: market expansion and continuous product upgrades. The company has invested in research and development to improve its product offerings continually. Moreover, it has benefited from the increasing adoption of smartphones in Africa. As more people in the region switch from feature phones to smartphones, Transsion’s profitability has improved significantly.
The African market remains pivotal for Transsion as the continent’s population is predominantly young and rapidly urbanizing. The trend of skipping the personal computer stage and embracing mobile internet directly is a boon for companies like Transsion, which are not Western giants. Africa currently constitutes 40 percent of Transsion’s market share, a substantial portion despite a decline from its peak of 57 percent.
To ensure sustained growth, Transsion has been diversifying its product portfolio beyond phones since 2019. The company now offers electronic gadgets, and home appliances, and even operates a repair business called Carlcare, along with developing some operating systems. However, phones continue to generate 90 percent of its total revenue.
While Africa remains a promising market for Transsion, the company is wary of expanding into regions where smartphones have already reached ubiquity. As more than 80 percent of Transsion’s phones are already smartphones, the company will need to explore new avenues to maintain its profitability. One strategy involves manufacturing midrange and high-end products, both in the smartphone and IoT (Internet of Things) home gadget categories.
Despite challenges in the broader global smartphone market, Transsion’s strong African performance and expansion into South and Southeast Asia have reinvigorated its growth prospects. The company’s focus on innovative products and strategic market positioning is expected to keep profits growing for the foreseeable future. As the world witnesses continuous technological advancements, Transsion is committed to remaining at the forefront of the industry and meeting the evolving demands of consumers worldwide.
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