Huawei plans 15,000 new retail stores around the world this year

Company is ‘optimistic and confident’ of reaching its target of 140 million smartphones sales this year

PUBLISHED : Tuesday, 26 July, 2016, 10:32pm
UPDATED : Tuesday, 26 July, 2016, 11:22pm

Huawei Technologies, the world’s largest telecommunications equipment supplier, plans to open 15,000 new retail stores around the world this year as it aims for a record-high shipment of smartphones and greater sales of premium-priced models.

“We are optimistic and confident about reaching our target shipment of 140 million smartphones this year,” Richard Yu Chengdong, the chief executive of Huawei’s consumer business group, said on Tuesday in Shenzhen.

That would mark a 30 per cent increase in smartphone shipments from 108 million units last year.

Unfazed by the lingering economic slowdown, Yu indicated the company’s retail store expansion would help its ability to reach more consumers and drive sales of its high-end smartphones priced in the US$500 to US$600 range.

“[The number of stores] is far from enough. We are going to open more retail stores overseas,” he said.

Huawei had 35,000 of its own stores around the world as of May 31, up 116 per cent year on year.

It has 11,000 stores located on the mainland, the world’s biggest smartphone market. It also has 6,500 stores spread across the rest of Asia, 6,200 in Europe and 1,500 in South America.

By comparison, Apple has about 484 of its popular retail outlets currently operating in some 17 countries.

With operations in more than 170 countries and territories, Huawei has a global retail presence that is supported by a growing number of third-party shops that sell its mobile devices.

These include establishments run by merchants inside shopping malls and those owned by mobile network operators, such as China Mobile.

The privately held Huawei on Tuesday reported that its smartphone shipments grew 25 per cent year on year to 60.56 million units in the first six months of this year.

Sales generated by the company’s consumer business group in the first half jumped 41 per cent year on year to 77.4 billion yuan (HK$89.8 billion), with more than half from overseas markets.

Data from market research firm GfK showed that Huawei’s share of the global smartphone market reached 11.4 per cent at the end of May. Its share of the premium smartphone market in the same period was 25.7 per cent, compared with 15.2 per cent at the end of March.

The Shenzhen-based firm, which also sells network equipment to telecommunications service providers and other enterprises, reported on Monday that its total revenue in the first half of this year

jumped 40 per cent to 245.5 billion yuan, up from 175.9 billion yuan in the same period last year, on the back of a steady increase in sales at its three main businesses.

Yu said Huawei’s smartphone business was profitable, but did not elaborate.

“We had about the same [profit] margin as last year … [but] it still lags far behind those of Apple and Samsung,” he said.

He said its growth has significantly outperformed the smartphone market this year, thanks to strong overseas demand and the popularity of its flagship P9 model with a dual-lens camera co-engineered with Germany’s Leica.