Nearly a year after leaving the Huawei system, Honor’s “curse” in overseas markets has finally been lifted. On the evening of October 11, Honor’s overseas official social platform announced that the company has resumed cooperation with Google and will continue to cooperate with Google in the future. The Honor 50 series released overseas is pre-installed with Google Mobile Service System (GMS).
Although Honor did not disclose whether other new phones will be pre-installed with GMS, this signal is still of great significance. After all, GMS is synonymous with the Android ecosystem in a sense. A “streaking” Android system that does not carry functions such as search, email, maps, YouTube, and app stores is almost unusable in the eyes of ordinary overseas consumers. .
Since Google stopped providing GMS support to Huawei, the latter’s overseas market share and sales have plummeted to an irreparable situation, and the glory of being a sub-brand is also difficult to escape. Fortunately, the crucial spin-off at the end of 2020 changed everything. When various unfair restrictions gradually disappeared, Honor was able to challenge many powerful players in the overseas market as an independent brand-not only the old players Apple, Samsung, but also Recently, domestic brands such as Xiaomi, Realme, and OnePlus have been in full swing.
Will it still win this time?
The picture comes from the official website of Honor Global
Pioneer going out to sea has become a myth in the past
Turning the time back to 2014, when Honor was first born as an Internet brand, one of the roles it played was the vanguard of Huawei’s mobile phones going overseas. At that time, Huawei’s foothold in the global high-end market was not stable, and the combined sales of the Mate and P series could not touch the heels of Apple and Samsung. When the future of the high-end market was uncertain, it focused on the low-end market, emphasizing youth, The glory of Internet marketing and cost performance has become the key piece for Huawei to break the game.
Facts have proved that Glory is really good at playing overseas. According to the core sales data released by Huawei’s consumer business in 2014, Huawei’s smartphone shipments reached 75 million units that year, of which high-end product lines (Mate, P series) accounted for only 18%, which means that Honor is Huawei’s Contributed most of the sales of low-end models.
Another set of data shows that Honor entered the markets of more than 60 countries and regions around the world intensively in 2014. It was also in that year that Huawei achieved 52% of its sales revenue from overseas, setting a record high.
Of course, neither Honor nor Huawei at that time had the ability to support the simultaneous expansion of dozens of markets, so the scope of Honor’s overseas expansion shrank for two consecutive years. It was not until 2017 that its territory gradually returned to 60-70 countries and regions. market.
This has not affected its sales. Relying on Huawei’s good relationship with multinational telecom operators, the two brands of Honor and Huawei have always performed well in several key markets-such as Russia, Germany, Finland, Czech Republic, Saudi Arabia and other countries. According to the data of the third-party organization GfK, in the first half of 2018, Huawei defeated Samsung and Apple in the Russian market and successfully won the top sales; and Honor not only ranked in the top five sales in the above markets, but also ranked in the sales of nine other countries. The growth rate ranks first.
The excellent results made Glory make a bolder vision. After fully exploring the overseas market in 2018, Glory set its development goal as “the top two in China and the top four in the world”. %growth of.
Unfortunately, this goal is doomed to fail. Not long after, Google announced that it would stop providing GMS authorization to Huawei, coupled with the subsequent interruption of chip supply and other issues, resulting in a significant decline in the latter’s overseas market sales. By the second half of this year, Huawei, which has neither 5G nor GMS, has long been reduced to “Other” in overseas markets, and the remaining markets have been divided up by major brands.
As a sub-brand of Huawei, the days of Glory are equally sad, even after leaving Huawei. According to CEO Zhao Ming after the Magic 3 conference, Honor’s overseas market share “almost fell to zero.” He also mentioned that Honor’s overseas market strategy in 2021 is mainly about recovery, including recovery of operations, channels, and retail capabilities.
Despite the worrisome development prospects, Zhao Ming still showed his consistent self-confidence when interviewed by the media. “We believe that the V-shaped rebound in overseas markets will be more beautiful.” He said.
The sword refers to high-end, will the overseas market buy it?
At the moment when restrictions on GMS and chip supply are lifted, Zhao Ming’s idea may not be empty talk, but it is not so easy for the new glory to regain its place in the overseas market where the competition is fierce.
At the beginning of its birth, Honor took a typical mid-to-low-end brand route, focusing on young consumer groups, and competing with rivals such as Xiaomi with cost-effective and rich marketing methods. At that time, Honor was backed by the self-developed Kirin chip brought by Huawei, so that it could overwhelm Xiaomi in the cost-effective market. But now, it is really difficult for Glory, which has lost this advantage, to set up a cost-effective banner, which also makes it change from a low-end leader to a follower of Xiaomi-following its old rival to move towards high-end.
Therefore, we can see the V series with gradually rising prices, the digital series (Honor 50) with fierce offline publicity, and the Magic 3, the key to the high-end of Honor’s efforts – its starting price is 4999 yuan, equipped with Qualcomm Snapdragon 888 The chip is also equipped with innovative functions such as Magic Live smart system and Magic Power fast charging, which is in the same gear as Xiaomi’s high-end series MIX 4.
In the domestic market where the level of national consumption is gradually increasing and consumers are willing to pay for high-premium products, it may be useful to use the high-end strategy of Honor’s sword, but success in the overseas market is far from simply copying the domestic high-end strategy.
According to Strategy Analytics’ statistics on the mobile phone market in Central and Eastern Europe in the third quarter of this year, local consumers still prefer affordable and high-quality cost-effective models, such as Redmi 9T, Mi 11, etc.; even Samsung, which has many high-end models, It still has to rely on the volume of mid-to-low-end models to maintain the third place in the local market.
The only exception may be Apple. According to data, Apple’s current shipments in Central and Eastern Europe accounted for 26.0%, surpassing Samsung to rank second, second only to Xiaomi. The reason is that Apple has always adhered to its high-end image and built a complete ecosystem, which makes consumers have a very high loyalty rate for replacement, and this is exactly the advantage that Honor lacks. When overseas consumers’ perception of Honor is still stagnant as a “young brand with high cost performance”, a new Honor that takes the high-end route may be difficult for them to accept.
Even if Honor continues to take the cost-effective overseas route, it still has to face many opponents. Typical examples are Realme and OnePlus, which were born out of OPPO. They not only pay equal attention to cost-effectiveness and youthful marketing, but also do not give way to glory in the supply chain, production and other links-after all, resources in the Oga system have always been shared. The product quality can be guaranteed and the cost can be effectively reduced, so the expansion potential can be described as huge.
Honor used to have a common supply chain with Huawei, but last year’s spin-off brought it a period of supply chain shocks. This year, it caught up with the global component supply shortage caused by the epidemic, which can be described as unsatisfactory. Even with the blessing of an excellent supply chain team from Huawei, restoring the supply chain is still a difficult job for Honor, especially in major overseas markets that have extremely high requirements on the supply chain. Being surpassed is still unknown.
Looking for a breakthrough
For New Glory, which is heading overseas again, there are very few markets where it can serve as a breakthrough point.
Once, the European market was an important stronghold of Huawei, but now it has been fully occupied by Xiaomi, Apple, and Samsung. It is not easy for Honor to regain its prestige when all three are eyeing the local area; the Indian and North American markets should not be taken into consideration-Xiaomi and Apple have been entrenched in these two places for a long time. Based on this, those underdeveloped markets may become the key to Honor’s comeback.
At present, Honor still has a certain foundation in several important markets of the former Huawei system, such as the Russian market. According to the data of Russian telecom operator MTS, in the first half of this year, Honor’s market share was 3.5%, slightly higher than Realme’s 1.8%, but still far from Xiaomi’s 12.8%. Honor accounted for about 6.5%, ranking fourth.
In the Russian market, Xiaomi has won a lot of sales by relying on “group army operations” (Xiaomi, Redmi and the new brand Poco), but it is far from dominating the entire market; The establishment of local factories, coupled with its consistent asset-heavy style of play, has made it difficult for OPPO players to spread the scale locally. In this case, with the reputation left by Huawei and the accumulated channel advantages, Honor still has a lot of opportunities.
Another market worthy of Honor’s attention is Latin America. After all, Huawei has been cultivating here for two years, and the probability of local consumers paying for its brothers from the same source is not small. According to previously released data, from 2018 to 2019, Huawei’s sales in Mexico, Chile, Colombia, Peru and other countries ranked among the top three, and the growth rate was once as high as double digits.
More importantly, the market share of Xiaomi, which is regarded as the biggest rival of Honor, is not high in the Latin American market. It withdrew from Brazil in 2016. In 2019, Xiaomi restarted its business in Brazil and gained certain advantages in Colombia, another Latin American country. However, looking at the entire Latin American market, it is still Samsung, Motorola and other brands that occupy the bulk of local mobile phone shipments.
At that time, Huawei put a lot of effort into localized marketing in Latin America, especially in sports marketing. For example, in 2016, it signed Messi with a lot of money. Earlier, it also signed well-known Latin American players such as Ronaldo and Sanchez, which successfully gained popularity. In addition, Huawei also attaches great importance to the expansion of offline channels, which makes it a market with a low Internet penetration rate. High Latin America occupies a great advantage. If Glory reproduced a similar style of play, it would be a reliable way out.
Of course, Honor also has other brands – such as its wearable products, AloT products, PC products, etc., which are several quite huge markets. Taking AloT alone as an example, according to the forecast report of Markets and Markets, the global AloT market size will increase from US$5.1 billion in 2019 to US$16.2 billion in 2024, with a compound annual growth rate of 26%.
Long before independence, Honor has been working on wearable and other tracks for a long time. After the official independence, CEO Zhao Ming also imitated Huawei and put forward the “1+8+N” strategic concept, intending to build a full-scenario product system. Although players such as Xiaomi and Apple are still entrenched in the wearable and PC tracks, Honor’s R&D system inherited from Huawei can help it narrow the gap—according to the information released by Honor, R&D personnel account for as high as 50% of its 8,000 employees. .
Whether Glory can surpass its former self, so that it can finally achieve Zhao Ming’s “small” goal – to surpass Apple, is still unknown. But in any case, in this era of changing winds, it must make changes that make consumers shine in order to survive. After all, whether it is domestic or overseas, it is difficult to accommodate another small and unattractive mobile phone brand.
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