For CKGSB Knowledge, Martin Roll discusses Huawei’s rise as a regional company to a global leader taking on the world, particularly the United States. But it is not a journey without challenges for Huawei to build and sustain a strong, global brand in a very competitive category.
Founded in 1989 in Shenzhen, Huawei Technologies has grown from an intermediary sales agent to one of the world’s most dominant technology brands seemingly out of nowhere. Huawei’s products and solutions are deployed in over 140 countries, serving more than one third of the world’s population. Currently the world’s second-biggest maker of routers and telecommunications equipment after Sweden’s Ericsson, Huawei has also become an upstart in the ultra-competitive smartphone race seeking to build the Huawei brand in that category too.
One reason Huawei lacks worldwide notoriety is due to its late expansion in to North America, where its greatest challenges lie ahead.
As a Chinese B2C company with up to one-fifth of the world’s population within its own borders, it is easy to understand how Huawei could grow in to a major technology player while still remaining rather unknown. With competitive pricing, it made sense to first serve other emerging markets in Asia – home to roughly 60% of the world’s population and many of the world’s fastest growing economies.
Europe was the next area of market expansion, where Huawei’s international contract orders exceed domestic sales for the very first time in 2005 as it became the preferred equipment supplier for Vodafone and British Telecom. At a time where Europe is not flush with money and telecom operators have profits in the red, those looking for cost savings and value will also be drawn towards Huawei.
By far the most difficult challenge for Huawei’s is in the United States where it faces an uphill battle in perception thanks to a smear campaign by the US government. Intelligence officials have recommended American firms not do business with Huawei due to potential Chinese state influence and security concerns.
Huawei is a private company owned entirely by its employees. Faced with such a smear campaign, Huawei will need to be open and transparent in a way they haven’t yet been. Without a public listing and the corresponding transparency, Huawei must volunteer more financial and corporate information. They really need to open the books and embrace the world in a way we haven’t seen before from a Chinese company. For example, Huawei disclosed the members of its Board of Directors for the first time in 2012.
Huawei can not admit defeat or forgo the US completely as is comprises about 20% of global telecom spending. While it does not need to be dominant in the US market, it must be accepted as it grows as a smartphone brand. If Huawei play this out well, it could be a significant showcase of citizenship and earn Huawei a seat at the table with the likes of other Asia technology brands in the United States such as Samsung, Lenovo and LG.
Media link: More on Huawei from Martin Roll and CKGSB Knowledge – Read the article: Huawei takes on the world
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