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China’s Huawei wants the world to know its name

A sales assistant looks at her mobile phone as she waits for customers behind a counter at a Huawei booth in Wuhan, Hubei province in this October 10, 2012 file photo.


The video scrolls out across the giant screen sprawled at the head of a hotel conference room. Text is superimposed on video of hikers and sunshine, city streets and smiles.

"Everything is changing."

"Because everything is connected."

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"Are you ready for what's next?"

The video looks like it's straight out of Silicon Valley. But it's the latest marketing material for Huawei Technologies Co. Ltd., a Chinese company whose devices power global cell networks, and whose smartphones are gaining international prominence. The video contains not a single word of Chinese. A subsequent address by Huawei's vice-president of accounting, Fan Chen, is also delivered entirely in English.

None of this is by accident.

Eager to sell the world more phones, and stung by allegations that its Chinese origins might make it a security threat – allegations it strongly denies – Huawei is attempting to remake itself as a company far beyond its roots in southern China. Its main ambition now is to "build a globally leading brand for smart devices that is loved and trusted by consumers," Eric Xu, one of its rotating triumvirate of chief executives, said Wednesday at the company's annual investor conference.

The company just has to figure out how, a challenge that will involve sorting out how to make a Chinese brand appeal to a global audience.

It's a question of growing importance in China, where Huawei is among a clutch of companies seeking to assume an increasingly central role in the global battle for smartphone sales. Though Samsung Electronics Co. Ltd. and Apple Inc. remain dominant, China is assembling an arsenal of challengers, all eager for a bigger share of the more than 1 billion smartphones sold annually.

Shenzhen's ZTE Corp. is making aggressive moves in the United States. Beijing-based Xiaomi Corp. unveiled plans this week to sell in 10 new countries, including India, Brazil and Russia. Xiaomi also chopped its name, with a new web address at that is a little easier on foreign tongues. BlackBerry phones are now largely in the hands of Hon Hai Precision Industry Co., Ltd – better known as Foxconn – a Taipei-based company with massive Chinese operations. Beijing-headquartered Lenovo Group Ltd. has agreed to buy Motorola.

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Huawei, meanwhile, has become the third-largest maker of smartphones. And though it still lags well behind Apple and Samsung, its market position has offered it a shot at greatness – if it can coax the world to buy more of its phones. In Canada, for example, it wants to grow its market share to 5 per cent, from its current position at under 1 per cent.

On Wednesday, it offered a glimpse into its plans, which begin with a new transparency. Even the most successful of Chinese companies often remain highly opaque, little different in their public relations strategies from the Chinese government itself. This week, Huawei allowed foreign journalists in to its analyst conference for the first time. Last May, company founder Ren Zhengfei gave his first interview in 26 years, to journalists in New Zealand. Two years ago, it launched its first-ever ads, and it has set out to build hundreds of retail outlets and thousands of kiosks.

Yet the company, like many in China, faces a difficult path to global hearts and minds. Mr. Xu, for example, said Huawei "will not engage in a significant advertising campaign. Instead, we want to leverage word of mouth to gradually build our brand." Huawei wants to raise its worldwide brand recognition by 58 per cent this year. But the plans it describes offer few clear details. In detailing its mobile phone strategy, for example, Huawei showed a complex flowchart with goals like "establish accessible premium credentials."

In Europe, where it has sponsored several soccer teams, Huawei said it hopes to sell phones by virtue of its status as an unknown: "consumers are bored by the current choices. They want to have new choices, if they're really different," said Shao Yang, vice-president of marketing for the consumer business group. But Huawei's current lineup offers few distinguishing elements, apart from price.

It all left analysts a bit cold. Word-of-mouth marketing? "I'm not sure that's going to be successful," said Michael Sullivan-Trainor, an executive analyst with New Hampshire-based Technology Business Research, Inc. Ken Rehbehn, a principal analyst of mobile infrastructure with Boston's Yankee Group, suggested creating a proper brand will require a strategy with "multiple legs," that involve "actually driving messages out through the media" – using advertising and sponsorships, as an example.

There are Chinese companies that have managed the transition. Qingdao, China-based Haier Electronics Group Co. Ltd., has become the world's biggest seller of appliances, beating out Samsung, Whirlpool Corp., and the rest. It did so in part by campaigns to overcome its unfamiliar name – "Live a Haier life," according to one Australian ad – and in part by routinely sending executives to tell its story to U.S. media. Getting there required seeing brand spending as an investment equally important to research and development, rather than an unnecessary expense, said Philip Carmichael, who spent five years as president of Haier's overseas operations.

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"Unless you invest in branding, it's not going to happen," he said. Huawei is making initial steps, with plans in Canada to announce its first corporate sponsorship in the coming weeks, for example. Canadian vice-president Scott Bradley calls them "cautious, calculated steps." Mr. Carmichael says it's not enough.

"Don't get me wrong: Huawei is a very sophisticated company. It has a lot of great technology," he said. "But they're not a consumer company yet."

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About the Author
Asia Bureau Chief

Nathan VanderKlippe is the Asia correspondent for The Globe and Mail. He was previously a print and television correspondent in Western Canada based in Calgary, Vancouver and Yellowknife, where he covered the energy industry, aboriginal issues and Canada’s north.He is the recipient of a National Magazine Award and a Best in Business award from the Society of American Business Editors and Writers. More


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