Chinese smartphone wave hits SA

Over the past three months, a wave of new smartphones from more than half-a-dozen Chinese brands have been launched in South Africa, and promotional campaigns have intensified as they challenge for a share of Africa’s most strategic market.

Huawei, Xiaomi, Oppo, Honor, Vivo, Realme and Itel have all released new handsets, ranging from the entry-level to high-end flagship devices. During the same period, the market leader, Korean manufacturer Samsung, released its new range of foldable devices, setting the scene for a massive battle of brands.  Each of the Chinese challengers aspires to wrest market share from Samsung, as well as to establish themselves as viable alternatives in the local market.

The South African market is highly strategic to these firms, for several reasons. It is seen as a springboard to the rest of Africa, which is still regarded as the biggest potential growth market for consumer technology. It has the highest proportion of users of basic feature phones of any continent, representing the biggest opportunity for migrating consumers to smartphones.

South Africa is also one of the few markets in Africa in which cellphone sales are largely conducted by mobile network operators. This means that, if manufacturers can convince them to “range” their devices – the industry term for adding them to available inventory – they are almost guaranteed a slice of a lucrative pie.

For some, like Huawei, the stakes are even higher. Frozen out of many Western markets due to sanctions imposed by the American government and its allies, the Shenzhen-based company treats South Africa as a priority territory, with a government that is also a friendly trading partner.

As a result, the visit of Chinese president Xi Jinping during the Brics Summit last month was timely, but every one of the brands approached for comment insisted that coinciding new product launches with the trip was unintentional.

“Our launches are usually cyclical,” said Akhram Mohamed, Huawei vice president of operations for South Africa. “Iin August 2021 we launched the Nova 8 series and Nova Y series. In August 2022, Huawei SA held the Xperience Huawei 2022 event where we launched 7 new products, including the Mate Xs2 Matebook X pro. These a based on our annual planning and product life cycles and not influenced by competitors.

“The timing of our launches are based solely on our business requirements and the market, and not influenced by anything else.”

Mohamed confirmed that South Africa continues to be an important market for Huawei.

“Even with new entrants to the market, with increased competition and the many challenges experienced over the last few years, Huawei continues to be one of the most loved and popular smartphone brands in South Africa. This certainly encourages us to intensify our strategy and investment locally.

“Our primary focus is on adding value to our customers through continuous innovation and an expanded ecosystem portfolio. Providing connected experiences and being an enabler to the lifestyle of our customers leads our thinking. Market share growth is therefore a by-product of this strategy and not the driving force.”

One of Huawei’s fiercest Chinese competitors, Oppo, ranked fourth in global smartphone sales, gained a head start when it launched a new flagship phone, the Reno10 Pro, in June.

“It is a competitive market, and our approach to the launch of our Reno10 Series was about being first to market and bringing the device to our customers as soon as possible,” said Liam Fourie, Oppo South Africa head of go-to-market and operations.

“We launched Oppo in South Africa in 2020 during the pandemic. The launch was part of Oppo’s global strategy to explore various markets around the world. Our focus is on growing market share and giving consumers the products, they love. We do see an opportunity to grow further into the continent.”

Last week saw the launch of a new flagship device from a brand that has quietly been positioning itself to disrupt the market. Honor, a sub-brand that was spun off from Huawei after it was sanctioned by the USA, still manufactures devices that are in lockstep with Huawei technology, while avoiding that company’s limitation of not being allowed to use the Google mobile services that run on Android phones.

Daniel Wang, president of Honor for the Middle East and Africa, told Business Times: “We launched the Honor 90 Series, which includes the Honor 90 and Honor 90 Lite, in late-August in South Africa following the Middle East and Africa launch, which took place in Dubai in July.

“Between now and September, we have great plans to introduce more smartphones and our range of IoT (Internet of Things) products in the fourth quarter and beyond that will enhance our product ecosystem in South Africa.”

Honor gadgets that are expected to be launched this month include the Pad X9 tablet, the Watch 4, and the Choice Earbuds X5 and X5 Pro.

“South Africa is a very important market for Honor globally due to its market capability,” said Wang. “Honor wants to develop the market with leading technologies and fully build an ecosystem of products to help empower South African consumers to thrive, especially in this increasingly digital world.”