President of HUAWEI Consumer Business Group in Russia and the CIS Leo Lee told RT about the ways to overcome the problems associated with imposed on the company by the sanctions, and the particularities of business development in Russia. What it means for the Russian market, how to develop mobile app store, AppGallery and that means the program “Tiger” — in an interview with Leo Lee.

HUAWEI has been working in Russia for many years. But the last year has been difficult because of U.S. sanctions imposed on your business. How did it affect your strategy in Russia?

The revenue of HUAWEI over the past half-year amounted to 454 billion yuan ($64,8 billion), which was 13% more than last year. In the consumer segment, we received 256 billion yuan ($36.5 billion), up 16% compared with last year. Net profit amounted to about 10%. Of course, we overcome obstacles because of U.S. sanctions, but we continue to move forward and develop the business.

In Russia we have two goals: first, to maintain its leading position, the second is to actively develop. To maintain stability, and we found the replacement components and software that are unavailable due to sanctions. We use our own authoring and delivery from other countries.

And for the active development we are creating our own ecosystem. We call it the “1+8+N”. This means that we focusareas not only in the business of manufacturing smartphones (which remain the number 1 in this formula) but in the other categories, for example laptops, tablet and wearable devices, headphones and speakers, the technologies of augmented and virtual reality (it’s a figure 8). We also do not forget about the mobile office, smart home, entertainment, fitness and sports, there are various usage scenarios of our devices (they can be a lot, so they are marked with the letter N).

In business terms this means that we began to receive more income from other categories. And the result is quite good: over the last half of our products from the category “8” showed significant growth. For example, according to the GfK report, sales of ultra-thin notebooks in Russia, HUAWEI increased its share three times over the past six months, and sales of wearable electronics showed a growth of 70%.

We also build their own ecosystem on the basis of HMS (HUAWEI Mobile Services). Mobile app store AppGallery entered into a three of world leaders. Our smartphones are more than 700 million people and 150 million of them are registered in the AppGallery. With 70 million users log into it each month (MAU).

This figure is just awesome, and in Russia the number of users of our smartphones is about 40 million, of which 12 million is used AppGallery and about 7.5 million are active monthly users.

HMS develops faster than our expectations, and there are several reasons. First, we are more open, we share the revenues with the developers on more attractive terms. Second, we are more loyal, and since the app store launched recently, we are trying to support the developers, ready to join us. For example, proposed is within AppGallery, which will help them to find their customers. In addition, all applications are tested thoroughly for safety, because we have very strict quality control.

Actively cooperate with local partners, including with “Yandex”, the Bank “Tinkoff Bank”, Mail.ru, MTS, “MegaFon” and others. All in order to create a comfortable environment for our users.

In AppGallery more than a million applications, and their number is constantly growing. Thus, of the 150 most popular in Russia mobile services almost 90% available in our store.

— How do you cooperate with Russian partners?

— HUAWEI does business in Russia for more than 20 years, and we managed to build a strong and lasting relationship with the local participants of the market of information and communication technologies.

We have recently embarked on a common program of digital community for the Russian industry of information and communications.

We describe its acronym TIGER (“Tiger”), where:

T — technology (Technology),

I — industry (Industry),

G — growth (Growth),

E — ecosystem (Ecosystem),

R — reliability (Reliability).

With this program, we want to share global experience in IT, including 5G technologies, artificial intelligence, cloud technologies, to help Russian partners to accelerate the process of digitalization.

In the retail business we also focus on mutually beneficial partnership — for example, “M. Video”, DNS, MTS, “Megaphone”, “Beeline”, “Connected”.

Our philosophy focuses on user requests: we also provide latest technology, quality service, brand stores and round the clock service support of the highest level. All this helps to form a reputation of the premium brand, our business partners, we help to solve problems and develop their business.

— As a brand HUAWEI’s perceived in Russia?

— Russia — one of the main strategic markets, and local consumers are becoming more friendly to the brand HUAWEI.

When I arrived in Russia in 2005, a business to develop, it was difficult because nobody believed that HUAWEI might create technologically advanced products of the highest level. There was still a residual stereotype.

But if you ask today’s consumers, what is a HUAWEI, I am sure they will give the exact answer. According to IPSOS, brand recognition is around 90%, while 47% of Russians say they are ready to buy our products. Also in the last six months the number of those who prefer HUAWEI has grown by 70%.