• How do Chinese Smartphone Brands like Huawei Survive in the European Market

    Posted on March 9th, 2017 Henry | No comments

    In Europe, a lot of people must’ve heard about Chinese smartphone brands like Huawei or Lenovo. More and more Chinese smartphone manufacturers are participating in some global electronic shows. For instance, in the Mobile World Congress that just past a few weeks ago, more than half of the smartphones announced are made in China or came from China.

    As a matter of fact, China has been one of the most crucial smartphone markets for a lot of manufacturers, whether they’re Chinese companies or not.

    And with the rapid development and spread of smartphones in China in the past few years, the demands are bound to decrease when the market comes to a saturated state. When facing pressures from both overseas and local smartphone manufacturers in the Chinese market, seeking development overseas seems inevitable for Chinese manufacturers. To many of those companies, oversea markets have never been so important before. If the company don’t want to subject to the limited increase of market sharing in China, overseas markets would be a good choice for development.

    According to the published data from a Chinese market research company, the growth rate of the Chinese smartphone market would drop from last year’s 20% to 5% this year.

    Marching into the European market is actually way more complicated than it looks. Some manufacturers used to grab attention from the public through launch events and sales promotions and they might not be working out well this year.

    Huawei is one of the few Chinese smartphone manufacturers that entered the European market in an early time. The company’s been applying a dual-brand strategy which turned out to be a success. According to a spokesmen of Honor, during the Black Friday period, the online sales number is inspiring, 35,000 units of Honor 8 sold out within 3 days which tops other smartphone brands selling phones online in West Europe.

    Huawei had set the goal of reaching 5% market share in Europe when it first enter the market and the goal was accomplished two years ago. Since then, the company set the goal to be around 10-12% and achieved it within 2 years.

    Huawei’s oversea sales have grown faster than in the domestic market. Especially in Europe, Huawei has taken more than 20% of the market share in certain countries. And in the overall west European market, it’s about 11%. And in the high-end smartphone market where Huawei has to compete with traditional brands like Samsung and Apple, it still takes up 14.3%.

    The dual-brand strategy plays a key role in Huawei’s success in West Europe. The sales number of Honor brand had registered at a year-on-year growth of 8.6% in 2016. The Honor brand is continuously breaking records in online sales which makes other manufacturers start to pay more attention to this field.

    “We didn’t have much staff in our team like other companies does, but when it comes to holiday promotion, we’d start preparing for it a few month in advance which helped us build up a solid foundation for our success later.” said the spokesman of Huawei Honor.

    The company also cut down products for under €80 and focused on high-end units which later helped them successfully get rid of the tag of “budget phone”.

    In actuality, in the European market, subsidies from carriers has a great impact on the sales of smartphones and dealing with carriers and subsidies plays a critical role in sales.

    Breakthrough in e-commerce helps Huawei go further in the European market to some extent but it’s never an easy task for Huawei. People in Europe tend to be more rational when making a choice in buying smartphones. A smartphone with a high price-to-performance ratio is not as appealing in China as in Europe, so the company needed a new strategy for the market. Huawei started off by interacting with customers through social media like Facebook and Twitter.

    Huawei believes that the combination of premium products and electronic commence can help the company break the barriers and move forward in a faster pace. The key to success always lies in the quality of the product and an applicable business model.

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