Why Huawei is investing in partnerships rather than advertising to take on the mobile giants

Huawei’s Western Europe CMO Andrew Garrihy says the Chinese smartphone brand is looking to take on Apple and Samsung with a major push in Europe, following the launch of its flagship smartphone.

Huawei’s CMO Andrew Garrihy talking at the launch of its ‘From Selfie to Self-Expression’ exhibition at the Saatchi Gallery

Chinese technology brand Huawei has its sights set on Apple and Samsung, as it looks to increase market share by expanding into global markets with its latest high-end smartphone.

Following the launch of its flagship devices the P10 and P10 plus at Mobile World Congress in March, Huawei’s CMO Andrew Garrihy is on a mission to push growth in Europe.

The company does not believe in the big brand advertising of its competitors, though, claiming it ends up being a cost to the consumer. Instead, Huawei focuses investment on research and development (R&D) to bring valuable innovation to its target market.

Although relatively unknown in the UK market, Huawei is the third biggest smartphone brand globally with an 8.3% market share. It increased brand value by 9% in 2017, according to the latest BrandZ ranking by Kantar Millward Brown, making it the 49th most valuable brand in the world.

Group annual revenue for 2016 increased 32% year on year to CNY521.6bn (£59.1bn), and net profits rose 0.4% to CNY37.1bn (£4.2bn). While this is much lower than the 32% increase reported in its previous financial year, analysts suggest the drop is down to an increased focus in R&D, with records showing an investment of CNY76.4bn (£8.6bn) in 2016.

Garrihy says the brand’s strong customer focus is the driver of that investment in R&D and any resulting product innovations.

Our approach is to engage in a focused manner with our core target market by partnering with cultural institutions and experts.

Andrew Garrihy, Huawei

According to Walter Ji, ‎president of Huawei Western Europe’s consumer business, investing in advertising is the business model of “others”. Instead, he says Huawei as a group has 80,000 people who are all engaged in R&D.

Although the way Huawei does branding may be very different to other companies, he believes “in the end, if you invest heavily in advertising, the consumer pays the bill”. He says if the brand invests in advertising, it will not be investing as much or enough resource into R&D.

READ MORE: How China surged ahead in mobile – and what the West can learn

Talking to Marketing Week at Huawei’s ‘From Selfie to Self-Expression’ exhibition at the Saatchi Gallery, Garrihy says: “You won’t see as much big brand advertising from us as you might from others. Our approach is to engage in a focused manner with our core target market by partnering with cultural institutions and experts.”

He adds: “We prioritise our investment on what we can deliver, both in terms of products but also in terms of experiences. There will be instances where we do traditional marketing but a big focus for us is [looking at] how we engage in an authentic way that adds meaning.”

Building the brand in partnership

Huawei’s latest phone release showcases technology built by other companies, but this isn’t an issue for the end user. Ji says the brand has more of “an open mind than other suppliers” in the industry by having “open ecosystems” and partnering with other companies in core engineering and the designing of its products.

He says: “In the end, the consumer does not care that the technology is owned by one company or by many, they care that the product is perfect to meet their request. That is our business philosophy.”

The P10 and P10 plus have been developed through collaborations with camera manufacturer Leica to appeal to photographers, GoPro’s video editing app is pre-installed and the phones come in eight colours through a partnership with colour experts Pantone.

“Partnerships are really important to us because they are part of our philosophy,” says Garrihy. “At our core, we believe in the power of collective wisdom and the power of what we can achieve when we bring experts together from [different] fields.”

Partnerships are a more “authentic way to go to market”, according to the chief marketer. The brand’s exhibition at the Saatchi Gallery, which explored the evolution of the selfie, is an example of how the business plans to target consumers in Western Europe.

Garrihy believes the Saatchi tie-up brings Huawei’s vision to life because its products are targeted “at an artistically-minded new cosmopolitan”.

He says: “That’s our persona. It is a perfect fit with the kind of people that would come into the gallery – people who want to stand out. People who want to be, think and express themselves differently.”

In the coming year, Huawei will continue the partnership approach, as well as being “a lot more disruptive” through activations and marketing executions done through those partnerships.

As a start, Huawei is taking the Saatchi Gallery selfie exhibition on tour to regional cities over the next few months. Garrihy says: “Expect a lot more disruption, bold activations and partnerships.”

We believe in the power of collective wisdom and the power of what we can achieve when we bring experts together from [different] fields.

Andrew Garrihy, Huawei

Ji adds that the brand is looking for more partners that can bring value and context to its products and consumers through its open ecosystems approach.

The Western Europe president says the brand cannot just repeat strategies that have been rolled out in the US or South Korea and expect them to work in Europe. He says: “To understand the consumer needs in the European market, the most important, better and faster way is collaboration with local partners.”

Meaningful innovation

Huawei champions meaningful innovation. With such a strong focus on R&D it is vital for the brand to ensure that any resulting product or service has an even stronger customer focus.

Ji says: “Innovation is wonderful but if it does not bring real value to consumers, in the end that consumer pays extra money for something they don’t need.”

Garrihy echoes this, adding: “Essentially, for us, innovation is anything that really adds value to our consumer and helps them change their perspective on the world or helps them do what they want to do in a quicker, easier, faster way.”

READ MORE: Marketers must reclaim the word ‘innovation’ before it dies

Although Huawei is “aware of what is happening” with its competitors, the brand makes “a conscious decision to stay focused on the core consumer” and give customers “everything that is meaningful to them and nothing that is not”.

It is because of this approach that Garrihy believes the brand can “deliver real value”. He says: “We are not asking [consumers] to pay for things they don’t really care about and don’t really need. We would rather focus our attention on really delivering meaningful value to the consumer.”