Cr. Xinhua News Agency
On March 16, Shenzhen Transsion Co., Ltd. (Transsion) received an official reply, becoming the first pilot enterprise in China to carry out the integrated domestic and foreign currency fund pool of multinational corporations.
To be approved as the pilot will increase the capital usage efficiency of enterprise
The pilot of integrated domestic and foreign currency fund pool of multinational corporations is one of the first batches of authorized items in Shenzhen comprehensive reform pilot project. Large entity multinational corporations that have obtained the pilot qualification will enjoy a better combination of cross-border fund management policies. First, the existing domestic and foreign currency fund pool policies have been integrated and upgraded to realize the integrated management of cross-border domestic and foreign currency funds within multinational corporations. Second, the amount of foreign debt and overseas loans has been appropriately adjusted to expand the space for cross-border two-way financing of enterprises. Third, the transfer of funds between domestic member enterprises of multinational corporations has been further facilitated, thus can improve the efficiency of fund management within the group. Fourth, based on the convenience of foreign exchange settlement, the willingness to purchase foreign exchange within a certain amount has been realized to give enterprises more choices in capital exchange.
According to Mr. Xiao, Chief Financial Officer of Shenzhen Transsion Co., Ltd., the company is known as the "King of Mobile Phones in Africa" and has established business in more than 70 countries and regions around the world, covering many "Belt and Road" countries such as Africa, South Asia, and ASEAN. In 2020, the cross-border settlement volume exceeded 40 billion yuan, of which about a quarter was settled in cross-border RMB. The approved pilot will greatly improve the efficiency of corporate capital turnover and save financial operating costs: First, through the integration and upgrading of policies and accounts, companies within the group do not need to open different accounts, and domestic capital transfers do not need to pass through the entrusted loan framework, to facilitate the collection and allocation of funds. The second is the increase in the overseas lending coefficient, which will help companies further integrate domestic and foreign resources and improve the cash management system in the post-epidemic era. The third is to introduce a certain amount of willingness to purchase foreign exchange based on facilitation of foreign exchange settlement. Enterprises can flexibly plan and choose the timing of foreign exchange purchases according to actual needs and market conditions, which will help reduce foreign exchange costs.
The logic of emerging of "King of Mobile Phones in Africa"
Transsion is known as the "King of African Mobile Phones" by the market. In 2020, its mobile phone shipments ranked fourth in the global market, and the African and Pakistani markets rank first.
According to the research of IFC Electronics, 77% of Transsion’s main revenue in 2019 came from mobile phone sales in Africa. From 2016 to 2019, the company’s product share in the African mobile phone market increased from 34% by 19% to 53%, making it the leading position of mobile phones in the African market.
According to data released by the well-known research organization IDC: In the fourth quarter of 2020, Transsion mobile phones dominated the African mobile phone market once again, occupying 48% of the entire African market, more than three times that of Samsung mobile phones.
How did it emerge? What is the secret of its success in Africa?
01. Develop a new method of its own. Insert the flag to the top of the hill that the giants can’t see.
In recent years, the mobile phone market of major countries in the world has begun to approach saturation and gradually entered the stock competition. However, the penetration rate of mobile phones in emerging markets composed of Africa, Southeast Asia and other third world regions is still low. The trend of the times has begun to shift, and these potential markets have gradually become favored.
Among them, Africa, as the world's second-largest continent with the largest number of countries, has billions of population. The improvement of medical and health standards and population growth (an average annual growth rate of 2.5%) have also provided a large-scale potential user group for the development of the industry.
In most countries in Africa (Sub-Saharan Africa), due to the constraints of the level of economic development, the construction of communication infrastructure is still relatively backward, and smartphones are far from popularization. Shenzhen Transsion Co., Ltd. has grasped the development context of the African era and took the lead in relying on the advantages of domestic manufacturing to enter the African market with low-priced and high-quality products.
02. Innovate precisely. To meet the needs of the local users with "deep insight" and "high adaption".
According to the research of IFC Electronics, the company's success in Africa is mainly based on multi-SIM&multi-standby; ultra-long standby solves the difficulty of charging mobile phones; high-power loudspeakers and music phones cater to user habits; dark-skinned camera technology better satisfies customized functions such as the photo requirements of dark-skinned customers.
There are a large number of operators in Africa, and the network tariffs of each operator vary greatly, and the cost of inter-network calls is high. However, it is not difficult to obtain a SIM card. African consumers generally hold many SIM cards. According to this problem, Transsion has specially designed dual SIM & dual standby or even "four SIM & four standby" mobile phones, which became popular in the market quickly.
It is understood that facial recognition is adopted to mainstream mobile phones to take pictures. This technology is suitable for light-skinned people, but Africans generally have darker skin, and facial recognition does not work well. Shenzhen Transsion Co., Ltd. noticed the pain points, and has developed a camera-based on the positioning of eyes and teeth. On this basis, it has strengthened exposure and helped African users take more satisfactory photos.
In addition, for African users who like to sing and dance, it increased the volume in terms of functions, the ultra-long standby battery and high-power flashlights introduced for Africa's frequent power outages are deeply in line with the living habits of local users.
For African users, these micro-innovations are truly grounded and respectful. Being good at insight into the consumption habits of local users and solving their pain points, and meeting the ever-changing consumer demand through product iteration is the key to Transsion's growing stability in Africa.
03. Brand Marketing. Build a competitive advantage in the whole chain of sales, production and service
In the face of fierce market competition, Shenzhen Transsion Co., Ltd. has established a brand that adapts to the market environment at various stages in accordance with the conditions of the target market and the different needs of consumers, and fully launched a multi-brand strategy.
Transsion’s advertising model in Africa borrowed from wall advertising in the early days. By directly spreading advertisements on outdoor walls in a large number of small towns, the strategy of "encircling the cities from the countryside" was used to reach consumers in a saturated manner. At the same time, it has formed the role of coupling with Transsion’s offline sales network, where the product sales network will be extended wherever the advertisement is done.
The infrastructure conditions in Africa are not complete, and the e-commerce penetration rate is only single digits, so marketing mainly depends on distributors. On the one hand, Transsion gives dealers ample room for profit, and on the other hand, it assists dealers in sales through on-site guidance, publicity and promotion. The generous profit level and good cooperation experience have enhanced the loyalty of partners and attracted more dealers to join.
These gradually established channel advantages are the biggest advantage of Transsion compared with other brands.
Based on reasonable brand marketing, the company has established a relatively smooth sales network in these underdeveloped markets by upgrading and transforming the informatization of distribution stores at all levels. Through the background real-time monitoring, regular analysis, advance forecasting, etc. to maintain continuous attention to the distribution network and market changes, a unique barrier to entry has been formed.
Transsion usually chooses markets with a larger population to enter in order to form a market scale quickly. In the early days, Transsion chose to enter Nigeria and Kenya, the most populous countries in Africa. Since then, Ethiopia, with a population of over 100 million, has also become the main production and sales market for Transsion. Transsion has also set up a local factory in Ethiopia to meet the production capacity of Ethiopia's domestic market while effectively radiating other neighboring African countries. At present, Transsion has enjoyed a high market share in sub-Saharan African countries, while expanding to North Africa and South Africa.
In addition to marketing channels, the after-sales service of the company is also in place. Unlike Apple, Huawei and other after-sales that only repair their brands, the product category of Carlcare service of the company covers many aspects such as electronic products, household appliances and lighting appliances. At present, Carlcare has established more than 2,000 direct or cooperative outlets around the world. It is the largest electronic and home appliance product-service solution provider in Africa, which is an excellent way to narrow the distance with users.
4. Managing precisely. To ensure low cost via efficient supply chain.
Raw material procurement of Transsion mainly adopts the production-to-order model. Most of the raw materials come from domestic manufacturers. Relying on the scale advantages of the company, it has reduced procurement costs from the raw material level. These are the reasons why the company's mobile phones can be sold so cheaply.
In order to meet the differentiated market needs of different countries, the company has built a diversified flexible production line on site. On the one hand, it responded to local market demand quickly, and on the other hand, it promoted the construction of local employment and production facilities. As the Deputy Minister of Industry of Ethiopia said, "Transsion is the first company in Ethiopia's history to export products overseas to help Ethiopia earn foreign currency." This has provided the possibility for Transsion to win more support from government.
Besides, the company attaches great importance to the construction of logistics network, and realizes the rapid delivery of raw materials and goods by setting up logistics warehouses in many overseas locations.
In short, thanks to effective supply chain management, the inventory turnover days (55 days) of the company are faster than Xiaomi (64 days); and under the condition that the original product unit price is lower, relying on the advantages of scale, it can still maintain nearly 30% of gross profit.
The successful experience in the African market has given Transsion a good inspiration. At present, Transsion is relying on the support of the African market to enter more emerging countries, and it has also begun to take shape and hit the market in Bangladesh, Pakistan and other countries. The approval of this trial will also help companies further integrate domestic and foreign resources and promote Transsion to build a strong moat for the African market.
Further reviewed by: Zhao Yuhui and Jiang Yongfeng
Reviewed by: Chen Jue
Edited by: Li Haibo
Source: www.stcn.com, IFC Electronics, www.STOCKSTAR.com