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Exclusive: Infinix Mobility exec Olamide Amosu on Nigeria's mobile device market

Nigeria , 05 Jul 2017

Exclusive: Infinix Mobility exec Olamide Amosu on Nigeria's mobile device market

This week in Lagos Original Equipment Manufacturer (OEM) Infinix Mobility launched its Note 4 and Note 4 Pro smartphones to replace its Infinix Hot Note 3.

ITWeb Africa spoke to the company's Communications Manager Olamide Amosu about the challenges facing OEM companies in Nigeria.

Paul Adepoju: Why have mobile devices become more expensive?

Olamide Amosu: It has a lot to do with the economy, particularly foreign exchange. Our economy fluctuates a lot. We don't determine the price anymore. Before, when the market was stable, we used to - but not anymore. Distributors get the devices before others and they sell to dealers. When it lands and the price is not good, they will not sell at all. If they had already brought the devices into the country at a higher cost and the dollar falls, they will not sell because they will do so at a loss.

Paul Adepoju: So basically you are saying distributors are the ones bringing the device into the country. Why is this not being done by Infinix which has presence in Nigeria?

Olamide Amosu: : We are the ones bringing the device into the country, but we are reaching the dealers through the distributors. We can't reach the dealers ourselves.

Paul Adepoju: Why is this the case?

Olamide Amosu:  The relationship we have with distributors is different from the relationship we have with dealers. You can't turn yourself into a distributor as a brand, it is not a good business move.

Paul Adepoju: When OEM companies made their devices available exclusively on ecommerce platforms, it cut out the middlemen like distributors and dealers. Isn't this a better model?

Olamide Amosu:  That is an exclusive retail channel. However, it won't be entirely exclusive retail channel because you will still need the distributor. Jumia does not buy from the companies directly manufacturing phones and laptops in China, there is going to be a middleman between the brand and ecommerce platform. It will be almost impossible to do without the middleman because they have much more capability of making devices available in more stores than a brand can do on its own. They represent every brand. They take the burden off OEM companies. They have warehouses, so a company doesn't have to pay for warehousing its products. OEM companies don't have warehouses, we all rely on the distributors. Ecommerce companies too are reducing their cost by closing warehouses since the distributors have warehouses and they are taking care of the cost for everybody.

Paul Adepoju: China is the factory for most OEM companies, including Infinix, yet the pricing is still being affected by the dollar exchange rates?

Olamide Amosu:  The policy agreement between the Nigerian government and China is yet to be implemented and you can confirm this by talking to dealers at Computer Village in Lagos. If Infinix sets a price that will not pay the distributor and the dealers, nobody will sell your product. Everybody wants to make money right? If you say you sell it at the minimum, everybody would want to cash out before the market fluctuates. Nobody wants to be stuck with goods they will not be able to sell. We cannot singlehandedly determine the price, we have to consider so many factors including maintaining the relationship we have with our distributors and dealers.

Paul Adepoju: Does Infinix have plans to retail directly?

Olamide Amosu:  Yes, very soon. We are working on it presently.

Paul Adepoju: What new strategies are you deploying?

Olamide Amosu:  What we started doing from last year was content marketing. We started building it internally. Without building such a structure, other brands will take the shine. We realised that if we can't offer customers more value, we are just like anyone else.

Paul Adopoju: Why is it still almost impossible for Nigerians to trade-in old phones for new ones?

Olamide Amosu:  The major reason is because we don't retail directly. To make it work, you need to work with a retailer and the only one that does it for now is Slot. The reason why trading in is still unpopular is because a lot of retailers don't want to take on the cost burden. In countries where trade-in works effectively, there is phone insurance which is very unpopular here. Another factor is the abundance of second-hand phones in the market. If you visit classified marketplaces, you would see that large number of fairly used phones are being sold, and people are buying them just like Nigeria's large market for second-hand cars.

Paul Adepoju: AfriOne began manufacturing local devices in Lagos. Why has Infinix and other OEM companies not yet started to work towards this? Especially since you all see the Nigerian market as Africa's biggest?

Olamide Amosu: The issue is market stability. Investors would be reluctant to invest in a volatile market. Even if you are assembling here, you will still need to ship in the parts which means you will still have to deal with the forex issue. Even if you produce locally, you still have to deal with expensive labor and infrastructural challenges.

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