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Business-to-business marketing practices in China. Brian Low
Huawei: a sleeping giant awakes?
Huawei was established in 1988 in Shenzhen, Guangdong as a private enterprise during the peak of China's economic reforms and technological advancement. The company had a humble beginning, and began by selling imported telephone call switches before manufacturing them. It grew rapidly by focusing on the relatively poor Chinese rural regions ignored by larger companies, making and selling low-end, low-margin switches and access equipment. Its product line has since expanded to include high-margin optical network, data communications networks, wireless networks, handsets and terminals (see www.huawei.cn).
It is now the largest telecom vendor in China, with reported 2004 sales of US$5.58 billion. This represents an increase of 81 per cent compared to 2001 sales of US$3.08 billion (see Table I [Figure omitted. See Article Image.]). This growth has been achieved at a time when global telecommunication giants like Alcatel and Lucent were experiencing a sales decline, and Motorola experienced minimal growth. Significantly, Huawei's international sales grew from US$330 million (or 10.7 per cent of total sales) in 2001 to US$2.28 billion (or 41 per cent of total sales) in 2004, a growth of more than 590 per cent (see Table I [Figure omitted. See Article Image.]).
Huawei's foray into international markets was initially limited to developing countries in South-East Asia, Central Asia and Latin America. The company then sought international growth into Middle Eastern nations, before turning their attention to developed nations, including the UK, USA, Sweden and The Netherlands. It has also established 32 worldwide branch offices, and eight regional headquarters, with established research institutes in Dallas (USA), Bangalore (India), Stockholm (Sweden), Moscow (Russia), Beijing and Shanghai in China.
In 2002, Huawei launched FutureWei, the company's wholly-owned US subsidiary, underscoring the company's commitment to international business and long-term investment in the North American market. The company has also actively participated in global research and development (R&D) and marketing alliances with US, European, and Japanese telecommunication giants.
Huawei's internationalisation has been achieved through a two pronged strategic approach emphasising price competitiveness and value-added technology products. The company is now the world's second largest-supplier of advanced digital subscriber lines, the primary conduit for the world's broadband connections. U-SYS, Huawei's end to end Next Generation Network...