Wednesday , August 17 2022

Promotions and patriotism: Huawei in "battle mode" sees mobile phone growth in China


SHANGHAI / HONG KONG (Reuters) – A 23-year-old Chinese student, Aaron Huang, has started searching for an Android replacement for his Apple (AAPL.O) iPhone in April of this year, it was clear which brand was trying to conquer it.

PHOTO FILE: Huawei logo is presented at the Mobile World Congress (MWC) in Shanghai, China, June 28, 2019. REUTERS / Aly Song

Huang Technologies Co Ltd and local retailers supporting the brand were omnipotent, said Huang, adding that he was influenced by the national media coverage describing the United States as unfairly targeting the Chinese tea giant in its war. commercial.

"I thought I should choose Huawei," he said.

Advertising campaigns and local patriotism have proven to be a powerful mix, amplifying the brand's current broad appeal to its domestic market – a market on which it is increasingly reliant, given Washington's ban on selling components. and US software to Huawei hinders foreign demand.

Huawei's smartphone sales to China increased by a third in the same period last year, with a market share of 10.6 percentage points to reach a record high. 38%, according to research firm Canalys. Submissions for Home Competitors and Apple Inc. (AAPL.O) fell.

Huawei has raised its sales target in China for its consumer group, said a company source, who was not allowed to speak on the matter and declined to be identified.

At Huawei, employees refer to current strategies as a "battle mode" and have accelerated the opening of new stores, including "Expert Centers" such as Apple's stores, other sources of society. . An expert center near its headquarters in southern China opened last month, while a larger one in Shenzhen's Nanshan Technology District will open next month.

Analysts say Huawei also delivered unhealthy mobile shares from other regions to China and even offered exceptional discounts in its domestic and foreign markets, as it seeks to offset the decline in sales in Europe and other countries. United States.

Huawei declined to comment on its marketing and inventory management strategies or its sales target in China. He reiterated an earlier statement that he was not trying to trade a patriotic zeal.


Sales promotions include cancellation payment plans and non-interest lotteries for the P30 and Mate series prize. Analysts add that the products of its three brands – Huawei, Nova and Honor – outperform those of its competitors in all segments of the market.

Companies like the Chinese electronic retailer Gome (0493.HK) and small businesses were eager to help, linking Huawei phones with patriotic support.

Fang Xia, a 38-year-old restaurateur from Shanghai, said she was motivated by the recent coverage of Huawei's dispute with the United States to give its customers a special offer.

"Boards that have four or more people on a Huawei smartphone will receive a free plate from Emperor Bullfrog," proclaims an advertisement for his restaurant's signature: a frog dish of 88 yuan ($ 12.50).

Huawei's smartphone sales abroad fell 28% in the second quarter compared to the previous quarter, according to Canalys data, but the full effect of the ban is not yet known.

Realizing that Huawei products could be a Chinese spy vehicle, the Trump administration now requires US companies trading with Huawei to obtain a special license. The U.S. government's response to authorization applications may come this week, U.S. Secretary of Commerce Wilbur Ross said on Tuesday. [nL2N24V15O]

As part of other measures to combat the ban, it may lose access to Google services (GOOGL.O) Android, Huawei is accelerating its efforts to develop its own operating system called Hongmeng. He plans to deploy a low-cost smartphone with Hongmeng in the fourth quarter, the state Times Global reported on Sunday.

Huawei declined to comment. He has already indicated that Hongmeng is designed for online products and prefers Android for its mobile phones.

Even before the U.S. ban, Huawei made huge strides in China, rising to a price range of $ 500 to $ 800 and pushing Apple's customers away from improved quality. [nL3N20M2V6]

"Whatever the segment, it offers many choices to consumers, more than any other brand," said Mo Jia, an analyst at Canalys, describing Huawei's strategy as a "bombing" strategy.

The rivals are suffering. Xiaomi (1810.HK), China's shipments in the second quarter fell 20% in the same period last year, Life fell 19% and Oppo 18%. Apple shipments fell by 14% and Chinese analysts and consumers say the US company could be even more affected in the intensification of the US-China trade war.

Xiaomi, Apple, Oppo and Vivo declined to comment.

While Huawei has been able to significantly strengthen its domestic market, analysts said that sales in China may not be unexpected as they may have problems replacing their US components and software.

"Without the original supply chain, we could see a slowdown in development speed," said James Yan, director of research at Counterpoint Research.

Reporting on Brenda Goh in Shanghai and Sijia Jiang in Hong Kong; Josh Horwitz in Shanghai and in the Beijing newsroom; Edited by Edwina Gibbs

Our standards:The principles of the Thomson Reuters Trust.

Source link