Date
22 July 2018
Richard Yu, CEO of Huawei Consumer Business Group, launches the P20 Series in Paris on March 27. Photo: Reuters
Richard Yu, CEO of Huawei Consumer Business Group, launches the P20 Series in Paris on March 27. Photo: Reuters

Why Huawei is opening a retail store in Hong Kong

Huawei Technologies, China’s biggest smartphone maker, will open its first retail store in Hong Kong by the end of July as part of its bid to narrow the gap with market leaders Apple and Samsung Electronics in the city.

The new store will have a gross floor area of 2,000 square feet in Tsim Sha Tsui, offering customers an opportunity to try out Huawei’s latest products.

The news came after the Shenzhen-based company unveiled its flagship P20 Series smartphones in Hong Kong last week.

Huawei boasts its latest offerings, with prices starting at HK$4,980, outperforms Apple’s latest iPhone in many aspects. The P20 Pro, for example, has a three-camera system, which takes pictures with a much higher resolution.

Huawei’s senior executive Richard Yu likes to call it the iPhone killer.

Still, Huawei and Apple are completely different in branding, given their respective history and background.

Apple is recognized for setting the pace when it comes to hardware and software development as well as user interface. It is known as a trendsetter.

On the other hand, the company’s “made in China” image has been weighing on its products. It is rather hard for consumers to think of Huawei as a trendy brand, despite the technical innovations found in its latest products.

In Hong Kong, Huawei has a market share of around 10 percent, behind Apple and Samsung, although the company says it is working hard to achieve 15 percent by the end of the year.

Toward that end, Huawei has to boost its public exposure in the city, and having its own retail store, rather than just relying on third-party channels, is a step in the right direction.

The move would allow the company to convince consumers that it is high-tech firm with a strong commitment to serving their needs.

The new store will also provide a venue for smartphone fans and prospective buyers to gather and try out the company’s latest products, thus strengthening its brand value in the long term.

The truth is, Huawei has been a bit shy in expanding its offline presence in Hong Kong. By comparison, Apple has five retail stores in the city since it opened its first one in Central in 2011.

Samsung has its Galaxy Studio to provide consumers with first-hand experience of using its products in Hong Kong. Xiaomi, which now ranks fourth in the city, is set to open its third store in the city in Mong Kok next year.

Hong Kong is a key battlefield for smartphone brands as it still serves as a gateway to mainland China.

For Huawei, its success in Hong Kong will enable it to fend off suspicions that Chinese brands are being used by state operatives to spy on users.

Establishing its own store in the city will enable Huawei to display its strong technological capabilities such as its efforts in 5G development and the self-developed Kirin mobile processor for its flagship devices.

Worldwide, Huawei is growing faster than most of its rivals and is in a neck-and-neck race with Apple. In fact, at one point last year, Huawei surpassed Apple in the volume of shipments, although that was before Apple’s debut of its iPhone X and iPhone 8 series.

While Huawei continues to rely on the home market and entry-level products for growth, it also seeks to cut a slice of the high-end market.

However, there is a big barrier along the way to realizing its ambitions.

Apple fans are willing to pay more for, say, an iPhone X not only because of the product’s specifications but also for the value of the brand.

Huawei’s P20 Pro and Mate 10 have outstanding hardware specifications that can beat Apple. But customers do not have as much passion for them as they show for Apple’s latest models.

The consumer’s perception may have been distorted by rumors and media reports about the substantial influence exerted by Beijing over state-backed enterprises.

But it is up to Huawei to build its brand and image. Opening a store in Hong Kong is pretty much straightforward, but for Huawei to sell its story to the public, convincing them that it is a hard-working and innovative company worthy of their loyalty and respect is the hard part.

– Contact us at [email protected]

CG

EJ Insight writer

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