Huawei Enters into Distribution Partnership With Micromax: What Does it Mean?

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Chinese smartphone brand and World’s Second largest company, Huawei, on Tuesday said it has entered into a distribution partnership with homegrown handset maker Micromax, a move that will help the Chinese firm strengthen its presence in the offline retail segment in India. Huawei had started selling its smartphones in India via the online route. Last year, it partnered with Croma to enter the offline retail channels and later inked a similar pact with Poorvika that operates a large chain of stores in the southern part of the country. And now, the company wants to take it forward with the partnership of Micromax.

Huawei-Micromax Partnership Officially Announced Today

“We are already present in 200 sales points through our existing partnerships. The tie-up with Micromax will give us access to a strong network of 1.25 lakh outlets across 40,000 pin codes,” Huawei India Consumer Business Group Vice President (Huawei Brand) Rishi Kishor Gupta told PTI.

Without disclosing the financial details of the partnership, he said the partnership is “aimed at a long-term association under a commercial agreement, primarily driven by sales and purchases”.

The move assumes significance as Huawei faces a ban from the US government. In May, the US government added Huawei to an “entity list” of companies barred from receiving the US-made hardware and software components without permission from Washington.

US President Donald Trump in June-end said the US companies could sell equipment to Huawei but there is no known regulatory development after his statement to end the ban.

Google, which supports Huawei’s smartphones with its Android operating system, had said it would continue to support existing Huawei smartphones.

Gupta said Huawei has not seen any impact of the global developments on the sale of its smartphones in India.

“Indian market is a top priority for us and we have not seen any slowdown in sales. We remain committed to the market and will launch more devices in the coming months,” he said.

Huawei Stands Second on the List of Global Smartphone Brands

Globally, Huawei was the number two handset vendor in terms of shipment with a 19% market share in the January-March 2019 quarter, behind Samsung (23.1%). It was ahead of players like Apple, Xiaomi and Vivo.

In the Indian market, Huawei is estimated to have 3-4% of the market share in the premium segment. The partnership with Micromax will allow Huawei to focus on product and technology development, while opening up a new revenue channel for Micromax that was a dominant player in the Indian smartphone market a few years ago.

The pact will not bar Micromax from launching its own devices in the Indian market.

“We don’t expect cannibalisation because Huawei and Micromax operate in different segments, we are more mass and mid-segment and they are premium handset makers,” Micromax Informatics Head (Marketing) Deepti Mehra said.

Huawei Plans to Launch More Devices in India

The company plans to launch new devices in the coming months and there are no plans to launch premium devices in the short-term from the Micromax stable, she added. Under a phased expansion plan, Huawei will retail its premium devices in cities like Delhi, Mumbai, Pune, Chennai, Kochi, Bengaluru, Hyderabad, Ahmedabad, Dehradun, Kolkata and Jaipur amongst others in the first phase.

Offline retail continues to occupy the dominant share of the Indian mobile market with an estimated 70% of sales being conducted through brick-and-mortar stores.

Companies like Xiaomi and Motorola, which had entered the Indian market by selling their devices online are now aggressively expanding their presence in offline retail.

As per research firm IDC, 32.1 million smartphones were shipped in the January-March 2019 quarter, up 7.1% year-on-year. Xiaomi led the tally with 30.6% share, followed by Samsung (22.3%), Vivo (13%), Oppo (7.6%) and Realme (6%) in the said quarter.

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Chakri is a go-to guy for your next smartphone recommendation. Back in his engineering days, he used to play with smartphones by installing custom ROMs and that passion got him into the tech industry. He still goes nuts about a smartphone knocking his door for review. Currently managing everything at Telecom Talk, Chakri is trying to master PUBG Mobile in his free time.

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