By Greg Gao

(JW Insights) Aug 24 -- Chinese smartphone brand Honor is adjusting its strategy to expand its overseas markets as it experienced two consecutive quarters of decline in the first half of 2023, according to a recent report by JW Insights. 

Honor experienced continuous growth in the Chinese market for two consecutive years after its spin-off from Huawei in 2020. Since the beginning of this year, Honor has been actively expanding its presence in overseas markets, with serial breakthroughs. Its overseas shipments in the first five months exceeded the total shipments of the previous year.

It plans to launch three phone models in India through distributors, with the mid-range series set to launch in September.

The Indian smartphone market look promising. The market only declined by 3%, and the high-end smartphone market grew against the trend. Global smartphone manufacturers are eager to seize the opportunity of Indian consumer’s upgrade cycle to improve their performance, including both Apple and Honor.

In 2022, the Chinese smartphone shipment experienced a double-digit decline, with OPPO, Vivo, Apple, and Xiaomi’s sales following suit. After restructuring, Honor accelerated its expansion, further integrating Huawei’s distribution channels, refining its product lineup, and gaining market share. According to market research firm IDC’s data, in 2022, Honor’s market share in China was 18.1%, a year-on-year growth of 34%, and its ranking further rose to second place. 

However, in the first half of 2023, Honor encountered significant drops in the Chinese market for two consecutive quarters. There were decrease of shipments of 22.8% in Q1 of this year and 17.9% in Q2 year-on-year, showed the IDC data.

Analysts believe that in the first two years after its spin-off from Huawei, Honor capitalized on the potential of China’s existing channels, maintaining growth. However, in 2022, it hit a shipment ceiling. Starting in 2023, Honor needs to further compete for market share with other players like OPPO, Vivo, Xiaomi, Huawei, and Apple. As the Chinese smartphone market entered a downward cycle, the competitive environment is becoming harsher, said an analyst from JW Insights.

2022 marked Honor’s first year of international expansion. It began to allocate more resources to overseas markets. However, due to factors like Covid-19 and inflation, Honor’s overseas market performance in 2022 wasn’t particularly impressive. Honor’s CEO, Zhao Ming, also stated that although the entire Honor product lineup entered the overseas market in 2022, the business was still in the early stages of problem-solving, recovery, and organizational development.

By the end of February 2023, Honor officially launched the Honor Magic4 series at the World Mobile Congress, simultaneously releasing the series in multiple countries around the world. 

In the first quarter of 2023, Honor’s overseas shipments surged nearly fourfold year-on-year, and this growth was evident in multiple markets. For instance, shipments in Europe increased by 400%, the Middle East and Africa by 500%, and Latin America saw a 700% increase in shipments.

After multiple meticulous arrangements, Honor holds a highly optimistic outlook for its overseas performance in 2023. Zhao Ming previously stated that in 2023, Honor has been actively establishing a presence in markets and countries, including Latin America, Asia-Pacific, the Middle East, and Europe. Its overseas shipments have the potential to achieve growth rates exceeding 100%.