To register, get added benefits and unlimited access to articles, Become a Member. Already a Member? Sign in.

WPP Faces Steep Challenge After Winning Huawei Branding Account

$32 Billion Telecom Giant Must Overcome Alleged Ties to Chinese Military

By Published on . 1

WPP has come out on top in a hard-fought pitch to handle global corporate branding for Chinese telecom giant Huawei. Now comes the harder part: molding the public image of a $32 billion business that the U.S. Congress has branded a threat to national security.

"Huawei has to conquer this prejudice held in many developed markets against "made in China.' They have to set Huawei apart and prove that Hua- wei is innovative, Huawei is high quality and, most of all, Huawei is not going to take your information and transfer it back to Beijing," said David Wolf, a Beijing-based business strategist and author of "Making the Connection: The Peaceful Rise of China's Telecommun-ications Giants."

A key challenge for Huawei is overcoming accusations that it's too cozy with the Chinese military and the country's Communist government -- an obstacle few marketers have had to face.

"If Huawei can accomplish what they're setting out to do, they're creating the template [for Chinese brands going global]," Mr. Wolf said.

Huawei built its empire as a global B-to-B network-equipment supplier. But it has begun focusing on its consumer-electronics business, particularly smartphones. The company said last week it will open a smartphone development center in Finland, a good location to scoop up talent from struggling Nokia.

WPP won the account after a pitch process at the holding-company level, beating out Omnicom in the final stage. Pending final contract negotiations, Huawei has not officially announced it has awarded the business to WPP, but a Huawei insider told Ad Age that the branding effort will target four markets: the U.S., Europe, Japan and China. Work is expected to make its debut in early 2013, possibly around the Mobile World Congress in Barcelona.

WPP, whose pitch team was believed to have included Ogilvy, Maxus and Burson-Marsteller, referred questions to Huawei. A Huawei spokesman said the company had no comment for this story.

Many aspiring global brands have the advantage of being extremely agile after succeeding in developing markets where the business environment is in constant flux, said Stephan Loerke, managing director of the World Federation of Advertisers, which recently opened an Asia office in Singapore to better serve these companies.

But unlike doing business in fast-moving economies, the process of establishing themselves in mature markets will require "discipline, strategy and consistency over time," Mr. Loerke said.

"In the long run, as Samsung clearly showed, global brand-building in the technology space is all about sustained innovation and R&D investment on products and services that are cutting-edge and, ultimately, of importance to end consumers," said John Quelch, dean of the China Europe International Business School.

Huawei has worked with a range of shops including Ogilvy, Fleishman-Hillard and MS&L. BBH, London, handles advertising for Huawei's devices business, including smartphones.

In this article:

Comments (1)

Read These Next