The numbers behind China's money spinning companies in Africa
China is fast displacing United States of America as the main economic partner of Africa.
According to the report titled Dance of the lions and dragons, about 10,000 Chinese-owned businesses operating in Africa are recording huge profits.
25% of these businesses broke-even in their first year while another 50% had three or fewer years to recoup their initial invested capital.
The report also identified that partnership between China and Africa is in four levels.
The country has robust partnership level with South Africa and Ethiopia, while Nigeria, Kenya and Tanzania are Solid Partners. Angola and Zambia have Unbalanced partnership status, and Cote d’Ivoire is the only nascent partner on the continent.
The report stated that Nigeria has the highest number of Chinese companies (920) operating in the country,followed by Zambia (861) and Tanzania (825).
Boldness and swiftness are noted as two main attributes that accounts for success of Chinese entrepreneurs in Africa.
Among Chinese companies that have transformed into big multinationals based on an Africa-focus are those listed below.
Tecno: A Mobile phone company tailored for Africa market
Tecno is of the most popular smartphone brand in Africa. It is owned by Transsion Holdings based in China.
According to McKinsey, Tecno has a high market share of mobile and smartphone markets in Africa. Its market share in some East African countries is as high as 40%, while Nigeria is its biggest market.
Tecno’s devices are generally affordable and features are to suit local need of Africans .
StarTimes: Fostering digital TV in Africa
StarTimes is one of the leading pay-television service providers in Africa. It has about 10 million subscribers with subsidiaries in about 43 African countries.
StarTimes also provides movies from Hollywood, Bollywood and other international movies in some local languages.
Major market of StarTimes is East Africa, where it has about 40% of the pay-tv market.
Huawei: Facilitating technology transfer to Africa
Huawei is another Chinese company that has made huge profits on the continent as the go to company for telecoms hardware.
Also, Huawei's open application program interface (API) is currently the backbone of most electronic payment processing in Africa, which is also a major source of revenue to the tech company.
According to the McKinsey’s research, Chinese companies are leading in technology transfer in Africa. Over 50% of new technology products or services are stated to be from Chinese origin.
FAW: On a quest to meet Africa’s automobile need
FAW Group Corporation is a Chinese state-owned automobile manufacturing company.
The $50 million assembly plant in South Africa assembles about 5,000 vehicles annually.
In Nigeria, the company also signed a major agreement with Perfection Motors in 2013, towards meeting the trucking need of the country.
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