Honor unveils strategy to conquer global smartphone markets
Honor, a leading Chinese smartphone brand that targets young users, said it had unveiled its global strategy to become one of the world’s top five smartphone brands in the next three years.
With the brand celebrating its fourth anniversary in its home city of Shenzhen, Honor President Zhao Ming said the contribution of overseas sales to the brand would grow from 15 percent this year to 50 percent by 2020.
He also expected sales revenue will have annual growth of 100 percent from 2018 to 2020.
Zhao, who will oversee Honor’s overseas development in person, said the brand will enter the most competitive markets and most heavily populated countries in the world.
Its growth strategy has mapped out the major target areas, including the United States, Europe, Mexico, Africa, Turkey, Pakistan, India and Indonesia.
Honor was already the third-largest smartphone brand in Russia by market share and top of Finland’s smartphone market in July 2017, Zhao said.
During this year’s Black Friday promotion, global sales of Honor grew 160 percent yearon-year. In Italy, in particular, sales increased 380 percent from the year before, while in the United Kingdom, the growth rate stood at 180 percent. Sales in Spain, France and Germany all doubled from the corresponding period in 2016.
Domestic performance
Zhao said Honor’s global strategy was launched at a time when it cemented its leading position in the domestic market.
The brand was created by Chinese tech giant Huawei Technologies in December 2013, to target young consumers mainly through e-commerce retail channels.
According to data from Sino Market Research, 49.7 million Honor smartphones were sold in China in the first 11 months of this year, resulting in 71.6 billion yuan ($10.9 billion) in revenue, surpassing its archrival Xiaomi to become the top player in the sector of smartphones mainly sold online.
Figures also showed that in November alone, the online and offline sales of Honor ranked No 2 in China, only second to Apple’s iPhone.
“We stick to innovations, quality and services, which are our brand’s ultimate advantages to win the market,” Zhao noted.
Honor was the first Chinese smartphone brand that launched artificial intelligence enabled products. On Nov 28, it launched its latest AIenabled V10, which has functions and capacity that “no other phone can even achieve in half a year”, Zhao said.
The brand will also keep an asset-light strategy in its global operations and focus on the integration of e-commerce retail channels and physical shops, Zhao added.
The Honor chief ruled out the possibility of a price war to increase sales.
“We are making stylish high-tech products that global young consumers are fond of. None of this kind of product can win the market by a price war, which has been proven the wrong tactic before,” Zhao said.
The experience gained from the domestic market could be used in Honor’s global development, he added.
Skills thirst
“Our products are excellent, and the market still has big potential, but we are short of employees with global perspective who understand Honor well,” Zhao told reporters.
In a move to boost Honor’s going-global plan — especially to hire the best people to support overseas market development — Ren Zhengfei, the founder and CEO of Huawei, signed a bonus incentive scheme to encourage sales of Honor smartphones.
It removed the bonus ceiling for all employees, no matter how long they have been working for the brand. Now, the more they sell, the more they gain, according to the scheme.
“We believe that just focusing on formulating plans can’t win markets, but strong execution with hard work can, when guided by the right strategies. What’s more important is the right person and the proper implementation,” Zhao said.
He said the new incentive scheme would encourage Huawei employees with bold minds to tap new markets to join Honor.
“Many overseas markets are undeveloped, or at the early stage of development. As long as you dare to enter, you have the chance to make big gains,” Zhao said, adding that successful “market explorers” would be paid generous bonuses.
Experience counts
Honor has been present in 74 overseas markets since its entry into Malaysia in 2014, which has accumulated experience for bigger global networking.
Zhao gave Russia as an example.
The brand first tested the market by selling its new products in e-commerce channels shortly after its debut and got a very positive response.
Soon after that, it attracted the interest of Russia’s biggest online retailer, DNS-Shop, which was looking for a partnership. Although the profit margin Honor offered the agent was 50 percent lower than competitors in the local market, Honor successfully became the largest client of DNS-Shop.
“I have made it a rule that any new partnership terms and conditions can never better earlier established partnerships. This ensures a long-term cooperation relationship with local agents,” Zhao said.
He noted that discovering new overseas markets is not always smooth, because “it takes time for new markets to understand your brand and products”.
He said what Honor will do and achieve in 2018 will pave the way for a successful 2020. “We will keep rational, with a clear and healthy business principle and model,” Zhao said.
According to the brand’s plan, while sticking to the online retailing mode, Honor will build more premium experience shops with local partners to provide an immersive experience for young consumers.
“As a bold pioneer in innovation and a leader in AIenabled smartphones, we are working hard to create intelligent and stylish lives for young international consumers, and ultimately become their favorite tech brand,” Zhao said.
We stick to innovations, quality and services, which are our brand’s ultimate advantages.”