Someone once told me that Samsung smartphones have higher market penetration in Angola than official sales statistics suggest. The reason for this disparity was found to be a thriving but unrecorded market for cellphones, awash with grey imports from China.
I never got to verify the anecdote above, but I could not help wondering about the size of grey and black markets for smartphones in South Africa, given the growing headache brought about by counterfeit imports that my beautiful country is battling with.
First, recorded facts
According to Gartner, there is a 16% smartphone penetration in South Africa. The last time I checked, the number of sim cards in circulation exceeded the human population of 50 million (the ratio may have declined owing to deactivations as a result of RICA)
A journey to the heart of Johannesburg
I gave into my curiosity this past Friday and conducted a quick market research. I figured the best sample base will be in Johannesburg city centre. Why this location, you may ask? Well, this is where real life happens for the often-neglected section of the consumer market with lower disposable incomes. So, off I went on a walk, through busy streets and alleys, with a hive of trade activity bursting at the seams due to this being the last the Friday of August. Armed with my iPhone, and at a great risk of getting into trouble with the traders who looked to be of Indian and Pakistani origin, I made some interesting discoveries as shown by the attached photos below.
My findings
I came across an alley (picture 3), which is part of what was famously called the Small Street in the late 80’s, without having to look too hard. Along this stretch of about 50 metres or so, there must have been 20 cellphone retailers (picture 5). I counted at least 8 brand names on display that were new or unfamiliar, including Nckia, Sumsnug, Halo, GoWin, Gild, JWD, Mobicel, and LC (pictures 1 and 2). Logos of the first 2 brands in this list could easily be mistaken for Nokia (picture 10) and Samsung (picture 7), and I suspect this was done deliberately to confuse consumers. Many of the observed cellphone models were carbon copies of mainly Nokia, Samsung, BlackBerry and even iPhone. There were also smartphones with well-known brand names, but some were obviously fake if price is anything to go by. As an example, I came across a retail store where a dual sim 32 gig iPhone was selling for R550! Another store was selling what looked like a dodgy BlackBerry Torch at R725 (picture 6).
What does this mean?
The 16% smartphone penetration is understated, mainly because of the unrecorded market that cannot be accounted for. However, the size of this market is anyone’s guess.
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