This phone is everywhere in Africa.
It’s called Tecno.
It’s made right here in Ethiopia and designed for markets like Ethiopia.
But it’s actually Chinese.
Tecno is owned by Transsion, a Chinese company that’s never sold a single phone in China.
It’s the fourth largest mobile phone maker in the world,
and the top smartphone maker in Africa.
They got so big by making phones that have Chinese components,
but are designed and assembled here.
The phones have features like cameras that calibrate for darker skin, multiple SIM cards,
and keyboards in African languages.
Transsion is an example of a wave of Chinese companies investing in Africa’s fast-growing
tech market.
These companies are bringing together Chinese manufacturing and designs by people who understand
their customers.
We’re traveling around the world to see how China is changing everything.
This week, a story about how one Chinese city is at the center of Ethiopia’s burgeoning
startup scene.
I’m Isabelle Niu reporting for Quartz.
This is Because China.
Ethiopia has one of the fastest growing economies in the world.
A lot of this growth is being fueled by China.
It’s hard to miss its presence here.
Even street vendors speak Mandarin.
The Chinese government has invested in large infrastructure projects.
Chinese companies are moving factories here, hiring the country’s young workforce.
70% of its population of 100 million are under age 30.
There’s also something really unique happening—
partnerships between Chinese companies and Ethiopian entrepreneurs.
Hruy Tsegaye is the co-founder of iCog Labs, the first AI and robotics tech startup in Ethiopia.
In 2018, iCog Labs, along with the Ethiopian Ministry of Technology and Innovation, organized
the country’s first hardware tech innovation contest, called “Designed in Ethiopia.”
They wanted to find the best product pitches from all over the country, and provide them
with resources to go to market.
To actually make the products, Hruy and his team turned to China for partners, specifically
to the Chinese city of Shenzhen.
Why do you prefer to work with Shenzhen makers and companies?
Hardware makers in Shenzhen like to brag that they can make electronics for the price of cabbage.
This market is part of what makes Shenzhen so appealing to Ethiopian designers.
It aligns with Shenzhen’s unique “open source” manufacturing ecosystem.
Open source usually refers to the sharing of code to develop software.
This is the sharing of parts and designs for hardware.
Companies come here to buy what they need.
The open source culture came out of the era of “shanzhai,” or copycat culture.
In the late 90s and early 2000s, the small manufacturers that were making electronic
parts for multinational corporations like Apple banded together,
to make knockoff versions of name brand electronics.
The Shanzhai era eventually faded, as name brand electronics became more affordable to
Chinese consumers.
But open source manufacturing continued.
And Shenzhen started getting recognized by the rest of the world as a hub for hardware innovation.
All of this happened within a very short time span, between 2010 and 2015.
Silvia Lintner studies entrepreneurship culture in China.
She says Shenzhen offers affordable technology that African tech entrepreneurs can adapt.
They began turning to Shenzhen as a place where they could actually make some of these
visions that they had sort of designing technology very specifically for an African context.
They felt like Shenzhen was a good partner in that.
David Li is the founder of Shenzhen Open Innovation Lab, or SZOIL, which connects tech entrepreneurs
from around the world to Shenzhen’s manufacturers.
His organization became the Chinese partner for “Designed in Ethiopia,” offering mentor
trainings and connections with Chinese factories.
Li says he is investing in African talents because of what he saw in Shenzhen over the
past 30 years.
Many international companies saw China only as a factory, and not as a resource.
–So this is the final product, you just plug it into a laptop.
This USB-like gadget is one of the product designs that emerged from “Designed in Ethiopia.”
It’s called the FM dongle.
You can plug it into a laptop to listen to and record radio programs without WIFI - which
is unreliable and expensive in Ethiopia.
It’s the kind of product the contest was created for– one that emerged from an Ethopian
mind with a unique insight into the market here.
Since winning the contest, they have made five prototypes.
–And that's sourced from China?
–They are using Alibaba.
Now, they are looking for investment to manufacture the FM dongle with Chinese partners.
From Shenzhen entrepreneurs’ perspective, finding partners in emerging markets makes
business sense.
Rising labor costs and fierce competition in China are driving many businesses to reach
more consumers outside the country.
Around 2013 and 14 a lot of people working in that industry felt compelled to change
the business.
Emerging markets tend to offer lower margins, but Shenzhen companies say they can tolerate that.
This kind of partnership is still pretty unusual.
China’s biggest investments in Ethiopia resemble those in other African countries:
they’re led by governments and becoming increasingly controversial.
Large loans are putting the country in a staggering amount of debt.
Many companies that set up factories have been accused of exploitation, environmental
violations and corruption.
Partnerships like Hruy’s might not replace more conventional investment in Ethiopia,
but he’s optimistic that it gives more Ethiopians a seat at the table.
We are moving towards China.
Because China is a better alternative.
And if they try to cheat us, we have to fight that, I know.
But at least it's something between partners.