Chinese Device Providers Take On Security, Quality and Obscurity

Chinese Device Providers Take On Security, Quality and Obscurity

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During recent conversations with Chinese device providers, we noted three common issues facing the companies, as well as the strategies they are employing to overcome them.

Security, Perceived Quality and Awareness

1. Security

Chinese Law Enforcement Facial Recognition Technology

Chinese law enforcement facial recognition technology

2. Perceived device quality issues

  • Despite familiar, global brands like Microsoft and Apple producing most of their devices in identical Chinese factories with identical quality standards, many rightly or wrongly perceive Chinese device brands as inferior products. Much of this assumption stems from the conflation of hardware and software. A consumer familiar with the user-friendly, known-quantities of Apple or Google may be unfamiliar with apps and software from unknown providers and attribute learning curve issues to substandard hardware.

3. Brand awareness

  • Chinese companies have perpetually struggled with global brand awareness, though BrandCulture believes this will be one of the transformations we see in 2019. Beyond Huawei, companies such as Xiaomi and Oppo are not yet household names in most of Europe and the United States. Despite quickly gaining domestic market share, these organizations are still mostly known only among a handful of aficionados outside of China.
  • Similarly, escaping from the long shadow of Huawei is no easy task. As the clear front runner, Huawei’s sophisticated marketing strategy and brand dominance do not yet allow for much competition (see below).

Branding, Product Ecosystems and Seeing Beyond Connectivity

1. Mass branding campaigns

  • The central squares of many major European cities furnish a vast canvas on which to build brand awareness. Huawei has been taking full advantage. While absent in the United States, the Huawei Mate advertising campaign is impossible to miss in Europe—imagine a 12-story high, city-block-long facade covered with just one vinyl advertisement. The Huawei brand messaging often features a beautiful woman or couple floating gracefully in a lofty, European-looking art gallery, underscoring brand pillars of elegance, ease, poise and sophistication.
Huawei European Ad

Huawei European Ad

2. Building out product ecosystems

  • Following Apple and Samsung’s lead, Chinese device providers have been developing and deploying broad, interrelated product ecosystems. Xiaomi for example is on the third iteration of its miBand, a semi-competitor to the iWatch. The miBand does not compete directly with Apple or Samsung on functionality, lacking features like full texting capability or voice response. But the smaller, sleeker and more streamlined device still offers the appearance of a broad product ecosystem without overdoing R&D and production spend. Chinese device providers have also invested heavily in building out their app ecosystems.
Chinese Device Providers: Xiaomi Mi Band 3

Xiaomi Mi Band 3

3. Capabilities beyond connectivity

  • With an aim to diversify beyond connectivity, many Chinese device providers are also using their deep knowledge bench to develop broader technologies such as artificial intelligence, robotics, smart city solutions, etc. As a strategic pivot, many organizations stated that they’ll go wherever the market ultimately guides them, so we’ll be keeping tabs on this trend. That said, more than one device provider admitted, in confidence, that while they had advanced research on artificial intelligence and the aim to make it a central brand strategy, they still struggled with how to package those competencies into a commercially viable product. Stay tuned as what’s next in these emerging areas comes into sharper focus, but rest assured that Chinese companies are poised to claim their fair share… and then some.

Read more about our special China series below:

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