Huawei has endured a series of blows in recent days – the most significant being the decision by UK-based chip designer ARM to suspend business with it – but industry observers expect the beleaguered Chinese tech giant to weather the storm.
However, several experts in Asia-Pacific also think it’s likely that Huawei will be forced to shift more of its marketing budget from paid media to PR and similar forms of communication – or at least in the short-term.
As the company tries to deal with the consequences of the US decision to ban it from acquiring US components and technology without US government approval, an unnamed industry source told Advertising+Marketing that marketing budgets could be “slashed”.
“One potential concern for agencies is the likelihood that marketing budgets might be slashed as a direct result of possible cost-cutting measures, if Huawei’s bottom line is significantly affected,” the source said.
“But in any case, PR and marketing efforts should go hand in hand to effectively recuperate market share,” the source added.
Another industry player, also speaking to Advertising+Marketing on the condition of anonymity, agreed that Huawei may have to divert more expenditure to PR, but said it remained a strong brand and might improve its business if consumers think it has been bullied.
Indeed, even before the latest developments involving ARM and Japan's Panasonic, there was evidence in a survey conducted in January that Chinese consumers were rallying to Huawei’s defence by buying more of its smartphones.
“Huawei is far too big and it’s not going to fall like a deck of cards. It’s a long game of attrition. It’s not the end, just the beginning,” the industry player said.
According to Advertising+Marketing, Huawei had been conducting a media pitch in the region and, although the outcome has yet to be announced, at least one marketing consultant advised that agencies should stick with their client for the long haul.
“My belief is that as partners with clients, the agency should try to understand the situation from the leadership team and be as supportive as possible, bringing solutions to their clients where possible, through thick and thin. The effort will be appreciated by the client,” the consultant said.
Eugene Lee, head of marketing at McDonald’s Malaysia, agreed. “If a media agency pulls out of the pitch because of what has happened, you wouldn’t want that company to support you as a partner moving forward either,” he said.
However, several experts in Asia-Pacific also think it’s likely that Huawei will be forced to shift more of its marketing budget from paid media to PR and similar forms of communication – or at least in the short-term.
As the company tries to deal with the consequences of the US decision to ban it from acquiring US components and technology without US government approval, an unnamed industry source told Advertising+Marketing that marketing budgets could be “slashed”.
“One potential concern for agencies is the likelihood that marketing budgets might be slashed as a direct result of possible cost-cutting measures, if Huawei’s bottom line is significantly affected,” the source said.
“But in any case, PR and marketing efforts should go hand in hand to effectively recuperate market share,” the source added.
Another industry player, also speaking to Advertising+Marketing on the condition of anonymity, agreed that Huawei may have to divert more expenditure to PR, but said it remained a strong brand and might improve its business if consumers think it has been bullied.
Indeed, even before the latest developments involving ARM and Japan's Panasonic, there was evidence in a survey conducted in January that Chinese consumers were rallying to Huawei’s defence by buying more of its smartphones.
“Huawei is far too big and it’s not going to fall like a deck of cards. It’s a long game of attrition. It’s not the end, just the beginning,” the industry player said.
According to Advertising+Marketing, Huawei had been conducting a media pitch in the region and, although the outcome has yet to be announced, at least one marketing consultant advised that agencies should stick with their client for the long haul.
“My belief is that as partners with clients, the agency should try to understand the situation from the leadership team and be as supportive as possible, bringing solutions to their clients where possible, through thick and thin. The effort will be appreciated by the client,” the consultant said.
Eugene Lee, head of marketing at McDonald’s Malaysia, agreed. “If a media agency pulls out of the pitch because of what has happened, you wouldn’t want that company to support you as a partner moving forward either,” he said.
Sourced from Advertising+Marketing, BBC; additional content by WARC staff
