Huawei has joined hands with Micromax to “expand its customer portfolio and presence in the offline market in India.” While terms, conditions as well as financial details of the new agreement remain scarce as of the moment, the tie-up will essentially entail Micromax using its offline sales network to distribute Huawei products “in urban as well as the rural regions of the country.” We’re looking at a phased expansion, with Huawei and Micromax kicking off proceedings from cities such as Delhi, Mumbai, Pune, Chennai, Kochi, Bangalore, Hyderabad, Ahmedabad, Dehradun, Kolkata and Jaipur. Both parties have confirmed it’s going to be a ‘long-term’ association, and eventually more cities will be added to the list.
“With an aim to be present where our consumers are, we plan to focus on a robust offline distribution network catering to the needs of consumers in urban as well as the rural regions of the country and to make them experience the innovative technology that has won the hearts of customers’ world over,” Tornado Pan who is India Head, Huawei Consumer Business Group, said in a statement.
Just to be clear, Huawei already sells its products via brick and mortar stores in India – through Croma and Poorvika - even though it did start its India journey by being online-only. Huawei’s renewed – and potentially its biggest - push for India’s offline market share comes at a testing time for the Chinese major. Huawei has been put into an ‘entity list’ by the Trump Administration which bars all US companies from doing any sort of business with the company. While there are a lot of technicalities involved, two key repercussions of the ban include – a) Huawei’s HiSilicon subsidiary can’t use ARM blueprints to make future mobile processors, b) Huawei can’t access Google’s Android in all its totality.
The recently concluded G20 summit raised hope that China and the US are in-sync to find some sort of middle ground – the summit also ended on a positive note with President Trump giving a ‘verbal’ go-ahead to US companies to start selling products to Huawei – but Huawei still isn’t off the ‘entity list’ which means US companies will still require some sort of approval from the Trump administration before selling their components to the company.
Short version – the future of all Huawei smartphones is uncertain, even though the company has reiterated time and again that it has (and will always have) its customers’ back.
And in the midst of it all, Huawei has some big ambitions. Huawei is currently the world’s third largest smartphone company and it is inching closer to Apple – Huawei is also said to have usurped Apple briefly to become the world’s second largest smartphone company according to data released by a few research firms. Huawei expects to better both Apple and Samsung (using the combined strength of Huawei+Honor) by 2020 – and while the state of affairs may not exactly seem to be in its favour, the Micromax deal shows Huawei is now seriously looking at India - world's second largest smartphone market - to become the world’s largest smartphone company post the US ban.
Huawei has been active in India a lot lately – it has been launching its new flagships here soon after announcing them elsewhere. The P30 Pro is a classic example.
While its offline expansion plans may also have a lot to do with recent changes in India’s e-commerce policy, grabbing more market share is without a doubt the catalyst - offline retail still dominates India’s market share by a fair margin, suggesting that’s where chunk of the buyers are. And because, the “brand has been witnessing overwhelming response from all section of consumers,” it was about time Huawei looked at raising the stakes.
As for Micromax, “we are pleased to partner with Huawei telecommunications, with this long-term partnership we aim to reinforce our commitment towards consumers in India. Together, we aim to move a step closer in solving consumer needs with innovative offerings. Additionally, we are looking at boosting our services and strengthening our association with our existing and potential customers,” Sunil Joon who is head, Strategy for Micromax Informatics said. Micromax will be free to build and sell its own products, like it used to.