The ambition of Huawei in European market
“Europe is like a second home market for us.”——Roland Sladek, spokesperson for Huawei
Huawei in Europe
Huawei, a leading global ICT (Information Communication Technology) solutions provider, offers the most complete telecom product portfolio in the industry to customers in Europe and worldwide, covering wireless networks, broadband networks, core networks, transmission networks, data communication, value-added services, terminals and services.
As the largest market for the information industry, Europe is of strategic importance to Huawei. Its European operations have been going from strength to strength since it expanded its business to Europe in 2000.
Huawei runs 17 R&D (research and development) sites (Belgium, Finland, France, Germany, Ireland, Italy, Sweden and UK) covering wireless, fixed, optical, future network, standard and chipset design technologies. It also operates numerous joint innovation centers in partnership with telecom and ICT partners. It is cooperating with operators from all over Europe including British Telecom (BT), Deutsche Telekom (DT), Vodafone, France Telecom/Orange (FT), Telefónica O2, Telecom Italia, TeliaSonera and KPN.
Huawei has over 7,700 staff based in Europe, of whom 850 are working in R&D. It is expected to double its European R&D staff and to create an additional 5 500 jobs in Europe by 2017. Its sales revenue in Europe reached around $5.23 billion in 2013.
Specifically, in France, by the end of 2013, 27% of the people interviewed already heard about Huawei, compared to 12% by the end of 2012.In 2013, they had 2.5% of shares on the French smartphone market and they expected to double it in 2014
Strategy of Huawei
Focus on research and innovation
As a global leading company focusing on high technology, Huawei pays much attention on research and innovation. As for 5G technology, it is announced by Huawei that before 2018, at least $600 million will be put into related research and Huawei believes in 2020 5G is expected to achieve commercial uses.
In addition to continuous input to research and innovation, Huawei also attaches great importance to intellectual property rights. According to a report by the European Patent Office (EPO), in 2014, EPO received 274,000 patent applications and Huawei ranked fifth with 1,600 applications. Huawei has received 493 patents, which ranked seventh among the applicants.
Targeting low-end market for entry
The strategy of Huawei in Europe can be summarized in two aspects:
- In a market of a specific country, Huawei entered from low-end market, gradually to middle and high-end markets.
- From the point of the whole European market, according to the intensity of European telecom market competition, Huawei also choose from low-end to high-end entry: first to enter the market in Eastern Europe, and then gradually to Central Europe, Southern Europe, Western Europe and Northern Europe. This is precisely what Huawei named “surround the cities from the countryside” strategy.
Since 2008, as the official sponsor of Beijing Olympic Games, Huawei uses both domestic and abroad advertising to improve its global popularity.
For European market, Huawei’s advertising mainly focuses on sports marketing. In October 2013, Huawei and AC Milan signed a sponsorship agreement that named Huawei Premium Sponsor and Mobile Partner of AC Milan. In 2014, Huawei made the entire sponsorship in La Liga. Differ from Samsung which focuses on football games, Huawei has more cooperation with football teams in order to increase its popularity.
Other potential Chinese brands
Besides Huawei, some other potential Chinese brands are also searching business success in Europe. In March 2014, MEIZU released its new model MX3 in France. Xiao Mi has set up its company website in French (http://www.xiaomi-m3.fr/). Undoubtedly, under the impact of the Chinese brand, the mobile phone market competition in Europe will be fiercer in the near future.
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