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E-commerce drives global sales for a Chinese smartphone brand

January 13, 2017 04:06 PM
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Huawei Technologies Co. Ltd. has become the third-largest smartphone brand worldwide with a strategy of mainly selling via the web. The Chinese technology giant has reported strong sales for 2016, but is keeping mum on how its entry into U.S. e-commerce last year has impacted sales.

Huawei said last week that it sold more than 11 million units of its entry-level Honor 5X smartphone in 2016 and plans to sell 20 million unit of its successor model, the Honor 6X, which launched last week. The company also said it has 80 million users of its devices worldwide and 100 million followers on social media. However, the company did not break out sales data for the United States.

Huawei accounted for 9.3% of the smartphones sold worldwide in the third quarter of 2016, according to market research firm IDC, putting it in third place behind Samsung and Apple Inc, No. 4 in the Internet Retailer 2016 Top 500 Guide and No. 11 in the 2016 China 500.

Huawei created the Honor brand in 2013 to compete with smartphone brands like Xiaomi, another Chinese company that primarily sells directly to online consumers rather than through bricks-and-mortar stores.

Honor entered the U.S. market in 2016 by launching its e-commerce site hihonor.com. It also began selling its phones on other U.S. retail websites, including BestBuy.com, Newegg.com, Amazon.com and B&H.com, and recently began selling Honor phones on online marketplace Jet.com, which Wal-Mart Stores Inc. acquired last summer.

“Our goal is to become a world-leading smart device brand for the younger generation,” Zack Zhang, vice president of Honor U.S., tells Internet Retailer. “We focus on the internet channel to grow our business, aiming at millennial consumers.”

Honor’s strategy includes joint promotions “with leading brands that also are targeting the same group of consumers,” Zhang says. “For example, we joined several campaigns led by taxi-hailing app Lyft so that we can offer promotions and discount s to attract the attention of many young consumers, like college students.”    

Honor says its online sales in China grew more than 40% to 2.2 billion yuan ($318 million) during Singles’ Day 2016, China’s big online shopping festival that takes place every Nov. 11.

“In the U.S. we offer consumers similar promotions and discounts,” Zhang says. The company sold 15,000 units of its high-end Honor 8 phone in the U.S. on Black Friday, the day after Thanksgiving, he says. The Honor 8 is selling at BestBuy.com for $400. The Honor 6 sells for $250.

Huawei also is working to generate buzz among U.S. consumers. For example, the company has established an online forum for U.S. consumers interested in smartphone technology, and got a strong response recently when it asked for online consumers to test its new Honor 8 smartphone operating system. “We were shocked because more than 700 online users applied in one day,” Zhang says.

Huawei also reported last week that its sales, including from such telecom gear as switches and consumer products like smartphones, increased 32% to 520 billion yuan ($75 billion) in 2016, with 60% of sales coming from outside of China.

Amazon.com Inc. is No. 1 in the Top 500, which ranks North America retailers by their online sales. Wal-Mart Stores Inc. is No. 4, Best Buy Co. Inc. No. 12, Newegg Inc. No. 17 and B&H Photo-Video No. 227. Xiaomi is No. 3 in the Internet Retailer China 500, which ranks retailers by their online sales in China.

 

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