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While Spotify got along with Apple and other big names in technology to target high-end users in the most developed markets, a Chinese start-up has raised funds to expand its music streaming business into the gigantic market but still emerging from Africa.
Boomplay, a service founded by Transsnet – a joint venture between Chinese phone maker Transsion and China's consumer giant NetEase – raised $ 20 million in external funds to try to penetrate more and more sub-Saharan countries and continue to develop its music database tracks.
The company currently has some 5 million pieces of music and videos on its platform – with a particular focus on African artists – with 42 million active users per month, of which about 85% are on the web. African continent (mainly Nigerian, Ghana, Kenya and Tanzania). ), and adding on average about 2 million users each month, a combination of paid and free subscribers, the latter viewing advertisements when they use the service.
In relative terms, it is only a small part of the African market, which has about 1.2 billion inhabitants.
The funding comes from Chinese investors Capital House and Seas Capital, as well as other undisclosed investors. Boomplay does not disclose its rating, but Phil Choi, head of international partnerships at Boomplay, confirmed that it was up from its previous campaign and that the company had raised $ 25.5 million so far, a modest figure, considering the hundreds of millions poured into Spotify, Deezer and many other streaming services, but a size that corresponds to what is still a very nascent target market.
"The board believes that it's best to be a stable company and work at a slower pace rather than taking more funds and going too fast," added Choi.
Apple music in Africa?
Some have described Boomplay as the Spotify of Africa (the same description that one of its local competitors, Spinlet, also gets), but I think it sounds more like the Apple Music of Africa.
The company began operations in 2015 when Transsion – the largest handset provider in the African market, with about 40% of the capital at the moment, combines features and smartphones, said Choi – decided to create mobile data services that it could sell to consumers to make its mobile phones more attractive and possibly generate additional service margin in addition to hardware sales.
He turned to NetEase – one of the leading Chinese mobile content developers who publishes games, has his own music service, and more (he even has his own Tik Tok clone, Vskit, pronounced "V-skit") – in 2017 to help development as well as other content services, tightly integrated with the phone platform. In 2017, they formed a joint venture called Transsnet. Boomplay – which also offers video and entertainment news (another Apple parallel) – is now a subsidiary of Transsnet; he does not disclose the size of his interest.
The service still benefits from Transsion's strong market share, but the group has also released mobile apps for Android and iOS that allow users to access a wider range of smartphones.
And it also exploits an opportunity for international growth, including positioning itself with Africans who have emigrated to the world and continue to listen to music from the continent.
"Music has no boundaries and we are committed to providing a rich, high-quality music experience for all users – not just in Africa, but around the world," said Joe He, managing director of Boomplay. "This investment will help us achieve this, by promoting cultural exchange and helping people communicate through the universal language of music."
Meanwhile, the boom in Africa is occurring at a time when streaming services that dominate in other parts of the world, such as Spotify and Apple Music, have yet to truly penetrate the continent. African. Spotify launched its first service in Africa in the most developed market of the continent – South Africa – in March 2018 and has not yet expanded its activities to other countries, while Apple – with its preferential rates – a, according to Choi's estimate, sold less than one million iPhones in the US market. region, which limits its growth potential.
As expected, Boomplay's growth mirrored that of the handsets on which it is pre-installed, but it covers a number of countries in the sub-Saharan region, as well as a wide range of local music alongside more international tracks, for example. through agreements with major labels like Universal Music and Warner Music.
The role played by China in the development of technology in Africa is interesting. It began years ago when Chinese companies such as ZTE, seeking growth outside their home market, won big contracts for telecommunication infrastructure, at a time when density telephone on the continent was the lowest in the world. Rather than building a fixed-line infrastructure, they built a mobile phone infrastructure, which eventually led to a wave of Chinese builders, manufacturing features and cheap smartphones, becoming one of the biggest handset suppliers. "The Chinese government has really pushed investment in Africa since they see a lot of potential," said Choi.
Despite the very local nature of the arts in Africa – particularly in areas such as music and film – the development of services such as Boomplay to provide this content has been a natural progression of China's technology growth in the world. region.
But if you follow the African market, you know that despite the great potential – on these 1.2 billion inhabitants, the average age is 21 – says Choi, a big market for the services of streaming music -, the economy is still underdeveloped, hindering significant growth.
In the case of Boomplay, this means not only to add more users in the world's poorest countries, but also to provide them with ways to pay more efficiently if they wish. .
"We have seen healthy growth, but one of the problems is that there is no sustainable or effective mobile payment system," Choi said. Payment processing, he said, "tThis can be very time consuming and can be unreliable. For example, errors may occur midway through a transaction. He said that the company already accepted Mpesa, one of the leading mobile payment services originally based in Kenya, as well as other payment methods. the plan is to add more to that soon.
In the longer term, Choi said that this will likely result in increased funding. Whether it comes from China or elsewhere will be interesting to watch. "Chinese investors see Africa as China 10 years ago," he said. "They feel that they can apply the same models and make this region a very prosperous region."
"Africa is full of opportunities, from its younger generations to its vibrant culture, and Boomplay is at the center of all this splendor," said Tony Li, CEO of Maison Capital, in a statement. "Boomplay has incorporated NetEase's experience in the streaming music industry with Transsion's expertise in local operations. In doing so, Boomplay has become the main player in the region in a very short time. As more and more Africa connects, we are confident that Boomplay will continue to be a major force in the commercial and cultural fields. "
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