Huawei: The move to premium, aiming for the topBy Mike Joubert 23 June 2016 | Categories: feature articles
On a recent trip to Huawei’s headquarters in Shenzhen, China, TechSmart’s Mike Joubert found a company ready for a fight to the top.
In any of China’s big cities you’ll come across shopping centres selling cheap knock-offs. While the price might be pocket-pleasing, the quality is simply not there. That’s not to say that the Middle Kingdom does not have something truly authentic to offer, with Shenzhen-based Huawei now doubling down on quality rather than cheap quantity.
Clement Wong, VP of Global Product Marketing at Huawei, believes that smartphone users have changed, becoming smarter about the choices available to them and upping expectations from a new device. He, like many of the Huawei spokespeople I met in Shenzhen, noted the company’s definite shift away from the mass market, moving towards the premium smartphone segment.
While talking about the latest flagship P9, Wong touches on one of the reasons for doing so, believing that if the company kept on pushing the low-end of the market, the brand would have suffered. “If you keep on selling low-end phones, consumers will not believe your brand is a great one,” he says.
Clement Wong, VP of Global Product Marketing at Huawei
With a large amount of Chinese manufacturers producing solid mid-range and entry-level offerings at very competitive prices, perhaps Huawei’s shift towards the higher end, with its sturdier margins, could just prove a very valuable strategy, with Gartner noting a “strong demand” for premium smartphones during 2015. This even if it comes at the expense of the lower-end market for the company. Huawei’s global director of PR, Ada Xu expounded on this strategy, relating an old Chinese proverb that states, if you wish to gain something, perhaps you have to lose something else first.
The China concern
For many, there are still perception problems regarding goods manufactured in China. Hawa Hyath, marketing director East and Southern Africa at Huawei, is quick to point out that, despite this, “We are a very proud Chinese brand.” She cites the rise of the luxury goods market in China as an example of higher expectations, linking Huawei to the positive side of China. “We are not shying away from the fact that we are Chinese. We think we are a rising global power, and therefore being associated with the positive sides of the country is where Huawei situates itself.”
From what we’ve seen from reviewing devices, the old label of ‘Fong Kong’ products coming from China, at least on the smartphone side, is less true these days. In referring to how far its products have come, Xu relates how five years ago, even Huawei board members were reluctant to use the company’s own devices. When looking at the latest metal unibody P9 and Mate 8, one can imagine that this is certainly not the case anymore.
Ada Xu, Huawei’s Global Director of PR
The product is the brand
Getting back to the consumer, Wong emphasises that the modern smartphone buyer is less swayed by the logo on the front of the phone, but rather the user experience. “Based on this, Huawei has a very big opportunity, because we are focused on making a perfect product,” he explains.
Xu reiterates this, stating, “The product, we believe, is the brand itself. What we want to do is focus more on the product quality, and secondly on marketing and sales,” she says. “With serious products year by year, we are quite confident we can win the high-end market.”
From my own experiences with Huawei since 2011 to the latest P9, there has been a strong progression in quality, accompanied too by an increase in price. The latest P9’s price-tag is confirmation that the brand feels comfortable enough to offer it at a premium - R12 000.
Xu though, touches on an interesting problem that the company has run into, noting that Huawei’s brand awareness is drastically increasing, but brand consideration – consumers actually buying the product – might not be as high as they would like. “We are trying to figure out this problem step-by-step,” she says, believing that they can learn from territories where Huawei is successful, including China where the brand has dethroned Apple as the top manufacturer, Germany, the UK and Spain.
And it seems like the company is indeed learning, seeing that they currently hold the number three position when it comes to international smartphones sales, with an estimated 2.6 million P9 smartphones sold in the six weeks following its launch - a 130% increase in sales from the P8, according to the company.
Hawa Hyath, Marketing Director East and Southern Africa, Huawei
Apple, Samsung in crosshair
Huawei has made it clear that they are aiming for the top, which means Samsung and Apple are both in the crosshairs.
Hyath offers further insight, noting that although people might think their competition is Samsung, from a branding perspective the company is building brand equity more orientated towards Apple’s territory. “We are focussed on becoming a leading consumer brand around the premium market, with innovation, fashion and technology at the centre of what we do,” she affirms.
The company has certainly upped the stakes when it comes to marketing, with the talents of both Henry Cavill (Man of Steel) and Scarlett Johansson (The Avengers) being seen in the international campaign for the P9. They also have a certain football player on board as brand ambassador, if the name of Lionel Messi rings any bells. Locally Huawei sponsors Ajax Cape Town, while the company is involved with AC Milan, Paris Saint-Germain and Arsenal.
The dual-lenses on the latest Huawei P9
To the top in five
Not content with a solid third place ranking when it comes to smartphone sales, Richard Yu, CEO of Huawei’s consumer business unit, believes the company can take the top spot in five years’ time. It’s a big mountain to climb, seeing that in 2015 Samsung sold more than triple the amount of phones Huawei had, and Apple double, according to Gartner.
It’s clear then that there’s a lot of things that need to go right for the brand for this to happen, including the ability to keep on improving on their top premium ranges – the P series and the business orientated Mate series.
The final word belongs to Hyath, who notes how important consistency is for the brand. “Whether you are European, American or African, you experience Huawei in the same regard – good quality products that understand your lifestyle requirements, that are relevant and accessible to you in the right place and the right time. It is that coming together that is important for us as a company,” she concludes.
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