Huawei boosts retail channels to stem margin decline
The telecoms equipment maker says it would have opened 56,000 retail stores worldwide by the end of 2017 to sell more devices to counter slipping margins
To counter the continuous margin squeeze, Huawei Technologies is accelerating the pace of opening new stores globally to sell more smartphones, with a plan to run 56,000 retail stores worldwide by the end of 2017, up from 35,000 in May last year.
The expansion of its retail channel expansion was backed by strong growth in smartphone sales, as Huawei shipped a total of 73 million units of mobile devices in the first six months this year, up 20.6 per cent from the same period last year, due to strengthened presence in its home market, Europe and the Southeast Asian regions, the Shenzhen-based company said in a statement on Thursday.
It could also buffer the slide in operating margins which fell to 11 per cent in the first-half of 2017, from 12 per cent and 18 per cent for the corresponding periods in 2016 and 2015, respectively.
Sales revenue from the consumer business group – its terminal product segment including smartphones and tablets – increased 36.2 per cent to reach 105.4 billion yuan (US$15.6 billion) during the first half, it said.
“The growth rate of sales revenue is higher than that for shipment, as Huawei has sold more high-end smartphone models in the first half of this year,” Yu Chengdong, CEO of Huawei’s consumer business group, said in Shenzhen on Thursday.
