Huawei Employs Direct-to-Consumer Strategy in American Mobile Market

by Matt Klassen on June 13, 2014

It appears Huawei isn’t quite as done with the American market as previously thought, as the infamous Chinese mobile and telecommunications hardware provider has initiated its own subtle rebranding process, following in the footsteps of its co-accused “national security concern” ZTE.

Taking a page out of Google’s early, and not to mention failed, mobile strategy, the Chinese telecommunications giant launched its own direct-to-consumer retail website on Thursday, GetHuawei.com, a site where American consumers can purchase the company’s latest flagship 6.1-inch phablet, the Ascend Mate 2 4G LTE direct from the company, either unlocked or purchasing a plan with Net 10, operating on AT&T and T-Mobile’s networks, seemingly Huawei’s last remaining ally in the American telecom market.

The move to go direct-to-consumer certainly isn’t really a surprise for Huawei, as the company has become a pariah following accusations from the American government that it serves as an espionage front for the Chinese communist party. But the question remains, will Huawei be able to break through the negative rhetoric and connect directly with the American consumer? I, for one, highly doubt it.

For the most part direct-to-consumer mobile experiments have yielded disappointing results. Such a strategy, as Google discovered with its original Nexus smartphone, has so far proved to be an ineffective way of connecting with consumers in the mobile market, not to mention the fact that it angers both retailers and carriers who are left out of such an arrangement.

But while Huawei sees GetHuawei.com as an essential portal for accessing its products and raising brand awareness in the U.S., the company remains realistic about its expectations for what the new strategy will accomplish.

“It’s not a revenue generator — not yet,” Michael Chuang, executive vice president of sales and marketing for Huawei’s US division, said in an interview. “It is a way to enhance our brand.” In fact, by circumventing the traditional mobile channels the Chinese company is hoping that word of mouth will help rebuild its shattered reputation inAmerica, particularly for its high-end smartphones.

To date most American carriers ignore Huawei completely, and those that do feature any of the company’s phones in their catalogue most often opt to support only Huawei’s lower end budget smartphone options. In fact, the company’s high end smartphones are practically non-existent in the American market, an issue that when added to the firm being labelled a “national security concern” has left Huawei on the sidelines.

But the problem with Huawei’s direct-to-customer strategy is that its short term vision for rebranding in the American market will likely sacrifice the one thing the company needs for long term success: relationships. As I mentioned, while circumventing carriers allows smartphone providers to control marketing and distribution, it cuts said carriers out of the process, and given carriers’ love from controlling the American mobile market, getting excluded just doesn’t sit well with them.

Now of course Huawei has adopted this new direct approach because most major carriers are largely ignored the company anyways, but I simply can’t see how it will achieve any sort of lasting success for the Chinese firm. If you want to win over the American mobile consumer first you have to win over the American mobile carriers, sure it’s a big job, sure it’s more difficult than launching your own website, but like it or not, it’s the road to success. While it’s laudable that Huawei is trying to go it alone in the U.S. market, the reality is that it’s going to be a waste of time.

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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