Huawei-Micromax deal focuses on expanding the gates of distribution: Dimon Hu, Huawei
Dimon Hu, CMO (Huawei Brand), Consumer Business Group, Huawei India, dismisses any conflict of interest being speculated between the two brands, as both cater to different segments
Chinese smartphone maker Huawei, to consolidate its retail presence in India, has entered into a strategic partnership with Indian company Micromax. However, the association is not for Huwaei’s sub-brand Honor.
Huawei is already facing a crisis in the US amid the ongoing Washington-Beijing trade war. In May, the US government added Huawei to an ‘entity list’ of companies barred from receiving the US-made hardware and software components without permission from Washington. Later, US President Donald Trump said the US companies could sell equipment to Huawei but there is no known regulatory development after his statement to end the ban. Google, which supports Huawei's smartphones with its android operating system, had said it would continue to support existing Huawei smartphones.
Speaking to exchange4media exclusively, Dimon Hu, Chief Marketing Officer (Huawei Brand), Consumer Business Group, Huawei India, said, “We see immense potential in the market. This growth in demand and supply warrants a multi-channel sales strategy to be able to be present where our consumers are. This multi-channel strategy calls for a seamless synergy between various stakeholders in the consumer electronics segment.”
Huawei started its India business by relying on online model only, but later adopted the brick & mortar route to boost its presence. The brand partnered with retail giants such as Croma and Poorvika.
As a part of Huawei’s strategic growth plan, its expansion will happen in a phased manner. “In the first phase, cities such as Delhi, Mumbai, Chennai, Kochi, Bangalore and Hyderabad will be covered. Then 15 tier 2 cities in Gujarat, Uttrakhand, West Bengal and Rajasthan will be targeted in the second phase. In the third phase, the company is looking to expand its presence in tier-3 markets,” Dimon explained.
“India is the biggest market for us. With Micromax being the prime distributor for Huawei, we are looking forward to further strengthen our offline presence in the market. We are looking forward to further strengthen our offline presence in the market. This strategic partnership will help us increase our relationship with the channel community. A strong channel network is very important in a country, where existence of physical mobile stores is of great importance.”
When asked what kind of roles both the companies will play in this partnership and how it’s going to benefit in the long run, Dimon replied, “It is a strategic partnership, which is aimed at a long term association under a commercial agreement, primarily driven by sales and purchases. There will be a no dilution between both the brands; Micromax will launch its product separately. The deal primarily focuses on expanding the gates of distribution.”
“The partnership between Micromax and Huawei is purely based on distribution and expansion of Huawei’s retail presence. Furthermore, we also dismiss any conflict of interest being speculated between the brands, as both cater to different segments and neither of the brands will be affected by the other. Both the brands will continue to exist independently,” shared Dimon.
However, it must be seen that this association will open a new revenue channel for Micromax. The brand was a dominant player in Indian market few years ago, until Vivo, Oppo, Xiaomi entered.
According to Counterpoint Research, Huawei’s market share in the Indian smartphone market was at 4 per cent in Q1 2019. Globally, Huawei was the number two handset vendor in terms of shipment with 19% market share in the January-March 2019 quarter, behind Samsung (23.1%). It was ahead of players like Apple, Xiaomi and Vivo.
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