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Africa: the New Destination for the Chinese Short Video Business

摘要: A quote from the famous book Out of Africa, "The silence was pregnant with possibilities. Now the moment had come when anything might happen", possibly offers the best description of Africa at this very moment.

Chinese players on the African continent

Since going online globally in the summer of 2017, TikTok has rapidly gained worldwide popularity. Now it is entering the African market following its successful expansion abroad to Japan, India and the United States.

However, before TikTok set foot in Africa, the continent was already the turf of Chinese short video apps. Vskit, an app specializing in African local short video sharing from Transsnet Media, currently leads the charge in the app-based short video sharing scene in Africa. Transsnet Media is the joint venture of two tech giants, NetEase and Transsion. NetEase is a powerhouse of the entertainment industry, while Transsion is the largest seller of mobile phones in Africa, known widely as the King of Africa.

Though TikTok and Transsnet are both in the business of short video sharing, their strategies differ when it comes to market expansion in Africa. TikTok is following the usual practice of applying a similar product with localized operations and content - just as Yiming Zhang, CEO of ByteDance, says, "Our strategy is global product, local content."

Right now, TikTok is focusing on the South African market as well as localized operations in other African countries such as Nigeria.
Young people using TikTok in South Africa

Young people using TikTok in South Africa (Source: TikTok)

In order to discover short video production talents in South Africa, TikTok initiated the first PickMe event in South Africa, primarily a platform for South African users to express themselves. The event gained support from partners including Huawei, MTV Base and Digify Africa. It has now become a trend among young people in South Africa to share videos on TikTok.

However, in Africa, TikTok has to face up to a fight with a worthy competitor, Vskit. Different to TikTok (though also developed by Chinese), Vskit is an app that developed in Africa, focused on African content.

Vskit is focused on the Nigerian market. According to official statistics from the app, by December 2018, Vskit's total user numbers had exceeded 10 million, in just seven months since going online, making it the number one short video app in Africa.

The number of local online celebrities in Africa signed by Vskit is approaching 500, while the total number of videos produced has already exceeded two million. It is ranked first or second in total downloads in countries such as Nigeria, Kenya, Ethiopia and Ghana. The app is currently accessible in more than 27 African countries across the east, west and south of the continent, for example Nigeria, Kenya, Tanzania, Ivory Coast and South Africa, and in multiple local and international languages such as English, French, Swahili and Amharic.

SHEZ-CUTEV is a student from a poor, inland city of Nigeria. This extroverted ingénue is very active on Vskit and has more than 150,000 fans. Her monthly endorsements and advertising income from producing short videos total four to five times the income of an average worker, equal to that of a senior manager.

Ay Pantsula, nicknamed the 'Song Xiaobao of Nigeria' (after a famous Chinese comedic actor) is skilled in a type of South African dance known as Pantsula.

His outstanding dance skills, sharp wit and creativity have made his videos that combine dance and comedy highly popular with viewers.
Top online celebrities on Vskit, the number one short video sharing app in Africa

Top online celebrities on Vskit, the number one short video sharing app in Africa (Source: Vskit)

The biggest advantage of Vskit is its shareholder Transsion. As early as 2007, Transsion began its exploration and cultivation of the African market. In 2018, it shipped 124 million mobile phones and user numbers on its app shop Palmstore exceeded 50 million, earning the reputation of the king of mobile phones in Africa.

Besides mobile phones, Transsion also sells household appliances in Africa. Through Vskit, Transsion's products are publicized and advertised in Africa, a process that also generates revenues for Vskit's advertising-supported business and enables online celebrities to cash in on the short videos they produce, forming a complete ecosystem chain.

Why Africa? Why Nigeria?

Why has Africa become the holy grail for Chinese businesses expanding overseas? Why have most Chinese internet companies chosen Nigeria as their first stop when entering the African market?

There are 54 countries in Africa, and they are divided into two main parts by the Sahara Desert. To the north of the Sahara Desert lie eight countries including Egypt, Lybia, Tunisia, Algeria, Morocco and Sudan, referred to as North Africa. To the south of the Sahara are more than 40 countries including Nigeria, South Africa and so on. It is on these sub-Saharan countries, especially Nigeria, that the focus has been for Chinese internet companies expanding on the continent.

  • Population Dividend

As of January 2019, the combined population of all 54 African countries was more than 1.2 billion, which included the highest proportion of young people in the world. It is predicted that in the next 20 years, 30% of all Africans will be aged 10-24. By 2025, a quarter of the world's population under the age of 25 will be African. The birth rate in Africa is very high, bringing with it huge demographic dividends.

Chinese internet companies focus their business on the sub-Saharan region.

Young people provide a sufficient labor force, are interested in new things, and make up the primary demographic using and popularizing the internet. They also create and consume the largest amount of online content. These youths will become the driving force of development in Africa if their potential can be unlocked and tapped into. Nigeria is the most populous of African countries, with 200 million people. It is estimated that the population of Nigeria will reach one billion in 2100, making it by far the most important country on the continent.

  • Widespread use of mobile phones and the internet

According to Google Play rankings, apps most used by internet users include those pertaining to social media, money lending, short videos and e-commerce. Three of the current top 10 Google Play apps are video-related.

The number of mobile phone users in Africa in 2017 reached 444 million, with the mobile phone penetration rate 44%. It is estimated that by 2025 the number of African mobile users will reach 634 million. According to Transsion's prospectus, in 2018, the business ranked fourth globally in annual shipment volume and first in Africa for market share. From 2016 to 2018, the company's smartphone sales grew from 16.61 million to 34.06 million units, with an average sales price of 454.38 RMB (around US$67.44). The average monthly salary of a Nigerian university graduate is approximately 1,000 RMB (around US$148.43).

Compared with other African countries, Nigeria enjoys a relatively stable political situation and better economic development. In Nigeria, with a population of over 200 million, the number of mobile phone users has reached 162 million and the smartphone penetration rate reached 35%. According to a news report in Nigeria's 'Daily Mail', the Nigerian Communications Commission (NCC) has stated that the number of internet users in the country increased to 113.8 million in January 2019.

  • Film foundation

Though surprising to most, Nigeria is widely seen to be the world's third-largest film industry after America's 'Hollywood' and India's 'Bollywood'. African movies are produced and distributed here. 'Nollywood' may have originated in Nigeria, but its films are popular with Africans all over the continent. On average, one film is produced in only two to three weeks in Nollywood, and the country's annual film production ranges from 1,500 to 2,000, surpassing by far those in other countries. Furthermore, in 2005, the Africa Movie Academy Awards (AMAA) were launched in Nollywood with the intention of recognizing and awarding outstanding Nigerian and African movie talent.

Even though most Nollywood movies are crude productions, the popularization of film is influencing video-viewing habits and helping to accumulate a future talent pool of video producers. In all, it provides a strong grassroots foundation for the rapid popularization of short videos and their content production and distribution in markets like Nigeria.

  • Music culture

In Africa, music is not something reserved for a small number of musicians or professionals, but an indispensable part of everday life. It is an outlet of entertainment for all. Like air or water, it is fully integrated into the lives of each person and community.

In Africa, music is an integration of art, society, politics and religion, and is used by its people to entertain themselves, to socialize and communicate with others, as well as to express emotions and political views.

African music has influenced many musical forms around the world, and many forms of music popular globally, such as jazz, originated in African culture.

Naturally, a very high proportion of young Africans are skilled in singing and dancing. For the production of short videos, its content predominantly composed of song and dance, this is a match made in heaven.

Facing the hurdles of expansion in Africa

In any unexplored terrain, opportunities may conceal hidden traps or danger. For the Chinese, these are lessons to be learned.

  • Legal supervision

Gambling is legal in many African countries - as long as a business is granted a license, it can start operating a betting place and business. These have become places for Chinese to visit.

Currently, in terms of short video content approvals, few religious concerns have been reported to date, even though many African countries are Christian or Islamic. The biggest issue and current focus in the area of content approval has been pornography, which is illegal in many countries. Existing technologies are not ideal to automatically identify exposed dark skin, and the recognition rate is low. Content censorship has to be dealt with manually, thus requiring local approval teams.

  • Procrastinating and laid-back

Africans are optimistic by nature, enjoy life and have a relatively slow pace of life. Many workers demand daily remuneration and disappear once they are paid. They will then re-appear a couple of days later once they have spent the money. It's a real problem for many Chinese employers.

Businesses opening up offices in Africa must adjust to the local rhythm. Africans seldom work overtime, which is not an African concept. A Chinese businessman in the telecommunications equipment business in Africa told iDoNews that he once needed a report from one of his partners, who promised to deliver it the next day. On the morning of the next day it was not delivered, and the partner called to let him know that due to a heavy traffic jam he would come in the afternoon instead. Then in the afternoon, he called again to inform that he had an unscheduled meeting to attend and the report would be delivered the following day. The next day he did not make it due to a family member getting sick. Finally on the afternoon of the third day, he turned up, yet with no apology or sign of remorse. That is the way of life there.

In Africa, replicating the speed of internet development in China remains a pipedream. Businesses must adapt to the local conditions.

  • Exorbitant internet cost

In Africa, the excessive cost of broadband is still a hurdle for users and the popularization of the internet. Currently, a mishmash of large and small providers co-exist. Cities enjoy better 3G coverage with providers such as Vodafone, Orange, MTN, Safaricoom and Celtel. In Nigeria, the average monthly cost of broadband is US$80 while the local minimum monthly income is only US$50. Wifi is accessible only in upmarket hotels in big cities. In restaurants and other public places, there is no Wifi.

In many African countries, such as Mozambique, data can be purchased based on periods of time, for instance daily, weekly or monthly. In Ghana, it will be a bit cheaper. In Nigeria, 1G costs about 30 RMB (around US$4.45) while the monthly salary of a local university graduate is somewhere around 1,000 RMB (around US$148.43).

One local Chinese told iDoNews a very interesting detail. Using the same network, people from China need to spend longer times to download videos sent by others on WeChat and experience interruptions when playing them.

However, people are able to watch YouTube videos relatively smoothly using local mobile phones.

  • MCN: Starting from scratch

The biggest problem for those in the business of short videos is the absence of a multi-channel network (MCN) organization; that is to say, no professional institution exists to nurture signed internet talent. Platforms must thus play the roles of platform and MCN at the same time, severely limiting their expansion. Currently, Vskit has started to carry out MCN-related work in Nigeria, and TikTok is rolling out corresponding plans. For Chinese platforms, local cultures, legal provisions and the spirit of contract are all considerable challenges.

A quote from the famous book Out of Africa, "The silence was pregnant with possibilities. Now the moment had come when anything might happen", possibly offers the best description of Africa at this very moment.

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This article was edited by the TMTPOST team. 

Follow us on Twitter @tmtpostenglish, Medium @TMTPOST and Facebook @TMTPOST.

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