The Chinese way

Source: Stockfresh



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25 October 2013 | 0

I was recently lucky enough to travel to China with Huawei. The company is endeavouring to be open and transparent through media engagement to combat negative perceptions in certain markets.

Now, while some might be cynical enough to say that the company was on a charm offensive, it was still refreshing to speak with a company that appears to be not only open and transparent on its abilities, but also in its reporting. Huawei publishes KPMG-audited accounts despite having no obligation to do so. But more importantly, the company seems to have no problem with admitting where it is weak in comparison to competitors.

Patrick Zhang, president, Marketing and Solutions department, said that the company lacked an in depth understanding of the big data centre business, despite providing enterprise kit in this area that was easily the match of the usual suspects in this area. He said this in the context of getting to the table to compete for data centre business in Europe. Very few companies at this level would ever make such an admission, but it seem to be a Chinese characteristic.

The group with which I travelled to Shenzhen was made up of UK and Irish media, but we were joined there by a Beijing-based Irish journalist who has lived in China for 10 years. This was a great boon as we were provided with context and examples of the Chinese way of doing things. Clifford Coonan is the Beijing correspondent for the Irish Times and provided invaluable background and information that greatly helped in our understanding of how Chinese business works.

Coonan was able to tell us that Chinese tech companies did not generally resent competitors, but rather admired them for their success and tried to emulate what they saw as worthwhile. Indeed, when asked about the likes of Samsung and whether Chinese companies were envious, he said that this was not the case. Coonan said that Chinese companies tend to examine their own capabilities and determine what they needed to improve to be competitive, setting time frames for the improvements.

This was confirmed when the group spoke to Shao Yang, vice president of Marketing for Devices, Huawei. When the inevitable question arose of how the company would compete with the iPhone, he said that Huawei looked at their competitors and saw that they each had strengths. Apple is very good at software he said, while Samsung excels in the technical. He outlined that Huawei had done a lot of work in both areas recently to become competitive (with the P6 and the D series handsets showcasing this) but that it had strengths that the others did not through its work in the carrier network business. Yang said that Huawei’s deep understanding of the network and its technology was something that it was leveraging to give its devices an edge.

This was supported in a later LTE roundtable, where Raymond Wei, director, wireless branding, said that Huawei had installed 4G networks in South Korea, Samsung’s home ground. This was further strengthened when Yang said that there is demand from operators for alternatives to Apple, Samsung and others, because there are things they are not doing to help operators with margins.

The overall impression then is very positive. Ambitious Chinese companies in the tech space do not belittle the success of competitors but rather look to see where they might improve themselves to better compete, but also where their unique strengths can differentiate them. By saying ‘we are not good at X, but in Y years we will have it sorted’, Chinese companies display a very healthy attitude for developing in a fiercely competitive world. Of course, it helps to have a grand scale to be able to support such ambitions, but as Huawei in particular has no real history of acquisition, preferring to develop its own capabilities in every desired field, it seems to be an approach that works.

Scott Sykes, global media relations boss, said that he was not sure when or with what catalyst negative perceptions would change in the US, but I would wager that we’ll be hearing more of the Huawei brand in the near future in the consumer and other space, but with this attitude in place, there will be other Chinese tech companies not far behind creating names for themselves alongside the likes of Apple, Samsung, IBM, Cisco and others.



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