Honor’s comeback in India could play out this way

    By
    Sudarshan Ravichandran
    -
    158

    The global smartphone market has been on a decline for the last few quarters. Almost all Chinese smartphone brands have faced the brunt of this decline, except for one. The odd one out is Honor, the former sub-brand of Huawei.

    Recently, a report by Counterpoint Research revealed how the brand is outperforming fellow Chinese brands in the international markets. At the same time, there’s also the rumor of Honor’s return to India.

    India is one of the world’s largest smartphone markets. Every major OEM has its presence in the country, except for Honor.

    As of writing this article, there is no concrete proof of, if and when Honor will again set foot in India’s smartphone market.

    Honor Logo

    Honor’s last days in India under Huawei

    While many would think that Honor hasn’t been active in India, the reality is that the company is still present in the country in a limited capacity. The ongoing geopolitical tensions forced Honor to withdraw its team from India in July 2022 but it continues to serve consumers in the region through its local partners. That’s how we still get to see the new MagicBooks.

    But it has been nearly three years since the brand released a smartphone in India. The last handsets from the company were Honor 9A and Honor 9S.

    These two entry-level smartphones were announced at the end of July 2020. Just like the Honor 9X Pro introduced before them (May 2020), they did not have access to GMS (Google Mobile Services).

    Thus, they came with Huawei AppGallery instead of Google Play Store. With limited access to apps, the last three Honor handsets in India were not really successful.

    Honor expands to global markets under new ownership

    Later that same year, Huawei sold Honor to a consortium called Zhixin New Information Technology Co. Ltd. Since then, the company has been slowly making a name for itself in select international markets with access to GMS and 5G chips.

    Europe and the Middle East were huge markets for Huawei and Honor during their peak. So Honor has been focussing more on these regions alongside Latin America.

    In just two years, despite the pandemic and economic uncertainties, Honor has emerged as top 5 in multiple countries. With a good understanding of the markets and a lean portfolio, the company is now growing while its Chinese counterparts are losing their market share.

    With somewhat stable business in key global markets, it does make sense for Honor to re-enter India. But the road to entry into a market like India is not rosy.

    Honor faces multiple challenges to enter India

    First and foremost, Honor needs to manufacture (assemble) its phones in India locally under the Make in India program. Because the import duty on finished handsets is set high in the country to boost local production.

    Under Huawei, Honor’s budget handsets were manufactured by Flex India since 2016. This partnership was forecasted to achieve 90% local production by 2020. Unfortunately, the US sanctions changed everything.

    Right now, under new ownership, Honor doesn’t seem to have a manufacturing partner in India. Additionally, just recently, India set new regulations for Chinese phone makers to require Indian equity partners.

    Perhaps, Honor could be working on these matters. But publicly, there’s no information available.

    There’s just an interesting rumor that former Realme India head Madhav Sheth might revive Honor India. But this could not be true as hinted by Trakin Tech’s Arun Prabhudesai.

    Let’s assume Honor manages to overcome the obstacles discussed above. In that case, this is how the company might strategize for India.

    Honor’s potential strategy for India

    In Europe, Honor is winning through partnerships with carriers who are the primary source of sales. However, in India, the brand will have to follow a different strategy.

    Honor was mainly an online brand in India. But the offline market is responsible for more sales in the country. Thus, it should have a presence across both channels in the country to succeed.

    Because, unlike earlier, Honor is no longer a youth-focused brand. Rather, it is a multi-faceted brand targeting different audiences.

    Currently, it has three lineups of phones, namely X, number, and Magic. The budget X series can be sold primarily online but the other two mid-range and premium series need to have more presence in offline channels.

    Anyways, I personally don’t think Honor will bring its Magic lineup to India if it re-enters the market. After all, established Chinese players (except OnePlus) are still struggling to succeed in the premium category in India.

    So I believe Honor might initially introduce the X series, followed by the number series. The former could compete against the Redmi Notes and Relme number lineup. While the latter can go against Oppo Reno and Vivo V phones.

    Honor X40
    Honor X40

    Honor X still continues to be a youth-focused budget product lineup. The number series, on the other hand, falls under the affordable premium category.

    Just like Oppo Reno and Vivo V handsets, you need to experience Honor number phones in your hands to appreciate them. Thus, they make a compelling option for the offline market, and therefore, require a robust distribution and marketing budget.

    So even if Honor re-enters India, it will probably focus on the X lineup for a while before expanding its portfolio. At the same time, it might continue releasing supporting ecosystem products like TWS, fitness trackers, tablets, and laptops.

    Indian consumers have lots of smartphone options as opposed to Western consumers which makes the competition stiff. However, even with the sheer number of phones, variety is still lacking when compared to the Chinese market.

    Honor has been one of those brands that not only spices up the competition but also provides alternatives. So, it would be really nice to have the company back in India.

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