Huawei is now a serious threat for Apple and Samsung thanks to its new Western strategy

 

Huawei’s eye-popping 70 per cent growth in 2015 is another indication of how China’s companies are successfully moving away from their traditional strategy of producing cheaper products to attack the low-end of the market.

That is how the Chinese telecoms conglomerate started, but last year’s success was built on a strategy and areas that Western firms have excelled in – marketing, brand building and customer service.

Huawei has moved away from simply making things cheaper than its rivals to concentrating on providing digital services, a space where Apple has excelled in for many years. The world of smartphones, tablets, smart watches and connected devices of the ‘internet of things’  is the new battleground to provide these digital services and Huawei has quickly announced itself as a serious player in it.

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Huawei is now beating HTC and Sony in for market share in Europe and is third only to Apple and Samsung in the world.  It has jumped from an unknown Chinese company ranked sixth in the world to the third biggest smartphone seller in less than a year according to analysts.

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It’s a race to get into your life

 

Existing brands such as Blackberry and Sony are already engaged in competitive marketing in both the product and customer engagement to grab a piece of the large but finite customer base, so Huawei’s rapid rise to overtake them is very impressive. Huawei has increased its global share of the smartphone market from 6.8% to 9% in 2015 - a massive 50% gain compared to Apple’s growth of 27%.

It suggests Huawei now understands how to play the smartphone market having put together new organisational and workforce strategies that have a laser focus on a customer-first mind-set, tightly driven by the needs of the local market.

In a crowded price-sensitive android market this matters greatly where mobile device choice and mobile provider brand awareness are critical. Just competing on product functionality and a brand name is not enough when the nature of ‘smart’ means you are always connected with your consumers through mobile devices and where feedback on social media is instant. Getting hold of the consumer and personalising the digital world for them with a good experience and price point that fits their lifestyle choices and needs is critical.  

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Huawei is a prime example of a modern commercial company mind-set emerging from Chinese industries. Its marketing is now embracing the local markets they are targeting more directly, aggressively going to the consumer with Huawei sponsorship deals with a host of big football clubs across Europe, including Arsenal, Paris Saint-Germain and AC Milan. Their product portfolio spans the complete modern telecoms provider from cloud computing, a full spectrum of network infrastructures to consumer, retail and enterprise mobile devices to offer custom and commodity solutions.  

In the digital economy understanding and talking to the customer first is crucial and Huawei is now doing this very successfully. Huawei understands the mobile market is now all about the customer service experience and no longer just a telecoms commodity.    

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“From knowing it to getting it”

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So what are the leaders like Huawei doing differently that is gaining them more market share in this tough market? 

Clearly nothing can be taken for granted, as history shows that pure brand loyalty seems to be less of an incentive for customers who are now loyal to the experience, the community and ecosystem of services that best fits their needs. With so much choice out there, it is more about listening and socially engaging with the customer that is key. They have the infrastructure and organisation to reach and connect in ways that are now 24/7, multi-channel and customer-relevant.

At least three key strategies seem to be emerging in the growth and consumerisation of the telecoms players in the new mobile, wearables and connected internet of things services.

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• A strong focus on ‘customer first’ philosophy from the CEO down through the whole organisation to run an effective customer experience management strategy that links customer needs with the ‘always-online to off-line’ continually connected service demanded by consumers.

• Use of product resellers and Value Added Resellers (VARSs) to extend penetration into markets such as a federated supply chain model that companies like Vodafone and Huawei have made work well and accounted for more than 40% of their potential growth by using an extended workforce. This becomes increasingly essential in being able to scale-up sales of the ‘long tail’ of the multitude of wearables and connected services in addition to mobile devices requiring a wide reach of skills and resource to sell and support adoption.

• Embracing international standards to get into thought leadership positions. This behaviour has focused on reaching out and understanding local and global markets and raising their game and influence. Then translating this into professionalising working practices in through-life management of the supply chain and its service delivery.

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 “Smart” means always connected

 

What Huawei has done well is realise that consumers are always connected and so companies that exploit this will start to gain more ground in the battle for owning the digital moments and spaces of their consumers.

It requires more than the specific strategies, but thinking holistically and joined-up about how to transform to a digital operating model in this new world of connected things. It looks like Huawei are learning fast as enterprises seek to be the new masters of this connected world.