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Chinese brands dominate the feature phone market in Nigeria in 2017

The Nigerian handset market grew by a modest 6% in CY 2017. The smartphone market which contributed to 52% of the total handset volume declined by 1% YoY due to the economic slowdown. Samsung led the overall smartphone market with 34% share in terms of shipments volume.

The Nigerian handset market declined 8% YoY in 2016 as the economy witnessed a major downfall in GDP due to plummeting oil prices which felled the economy into recession. The country is highly dependent on oil exports and the decline in oil prices put pressure on the Nigerian currency, Naira raising the prices which adversely affected the purchasing power of the people. The overall handset market experienced modest growth of 6% p.a. in CY 2017 as the market is slowly moving out of recession. The situation is likely to improve in 2018.

Exhibit 1: Nigeria Smartphone Shipments Market Share in 2017

The top 2 OEMs – Samsung and Transsion Group (its brands include Tecno, Itel and Infinix) captured two-third of the total smartphone market. Samsung still retains the top position with more than one-third share in the total smartphone market. While in the feature phone segment, the market is dominated by a single OEM with 76% share. This highlights the dominance of Chinese players in the feature phone market.

Exhibit 2: Nigeria Feature Phone Shipments Market Share in 2017

Almost one-third of mobile subscribers currently use smartphones in Nigeria. With the country now out of its economic recession, we estimate the smartphone market to grow in double digits in CY 2018, driven by the entry of new players and changing OEMs strategies. Operators like Airtel and MTN will also look forward to partner with OEMs and Microfinance companies to drive smartphone penetration across the country.

Market Summary:

  • Nigeria’s smartphone market shipments volume declined by 1% YoY in CY 2017.
  • Top 5 brands accounted for 70% of the smartphone shipments.
  • Samsung led the overall smartphone market with a share of 34% in CY 2017. Though its shipments volume, declined 4% on an annual basis due to rising competition in the market and availability of affordable devices.
  • Tecno captured the second position in the smartphone segment with 16% market share, as the company introduced new smartphone models under ‘Spark Series’ and upgraded its existing ‘Camon Series’. The company also offered huge discounts on its newly launched models in the third quarter of 2017.
  • Itel remained at the third spot in the smartphone segment as its shipments increased four times and the company expanded its product range and distribution.
  • During the year, several new brands entered the Nigerian Market like Freetel, Xiaomi, and Motorola in the smartphone segment. However, they captured a smaller share of the overall smartphone market.
  • In terms of distribution, approximately 85% of the total Nigerian market sales are through offline channels and online channels contribute to 15%. TD-Mobile is the leader in offline distribution while the online market is dominated by Jumia and Konga.
  • Feature phone penetration reached 48% of total mobile phone shipments in 2017, up from 44% a year ago.
  • The feature phone segment grew by 15% YoY, driven by strong performance of Tecno, and Itel.
  • Tecno became the number one player in the Nigerian feature phone market in 2017 with 41% share in 2017. Its dominance is due to affordable offerings and wider reach.
  • Nokia HMD quickly gained 6% market share in 2017 due to the strong performance of Nokia 105 (2017).
  • The Nigerian handset market is highly concentrated towards low price segment as the consumers are highly price-sensitive.

Anshika Jain

Anshika is a Senior Analyst with Counterpoint Technology Market Research, based out of Gurgaon. She has more than 10 years of work experience in market research and business intelligence field. She led various research and consulting projects for multiple sectors including BFSI and Telecom. Apart from this, she also has key client handling experience with leading MNCs. She holds a Master’s in Business Administration from IMT Ghaziabad, specializing in Finance; and a Bachelor’s degree in Economics from Hansraj College, Delhi University.
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