HONOR starts to make its mark in Latin America

HONOR has great ambitions in Latin America. The vendor began constructing a logistics hub in Panama in summer 2021, which it hopes will be completed by the end of 2022. It also officially inaugurated its first distribution center in Latin America at the start of October, on the outskirts of Mexico City, to fulfill partners’ and end customers’ national demand. HONOR then launched its official ecommerce site and the new HONOR 50 device in Chile, Colombia, Mexico, Panama and Peru, which is also exclusively available through América Móvil (Telcel and Claro). It may have been a rapid arrival, but HONOR obviously plans to stay in Latin America, considering the number of investments it has made so far, even when its range of available products is still quite limited.

HONOR is looking to fill the gap left by Huawei, fulfilling an unmet demand for high-end Android smartphones. It is no coincidence that HONOR is launching in the countries mentioned above. These markets represented 81% of all shipments for Huawei in Latin America in 2020. Could the Honor 50 and Honor 50 Lite fill the gap left by Huawei? In theory, HONOR’s strategy could work, considering the two models fall in the sweet spot where Huawei used to perform very well. In Mexico, Huawei shipped more than 2 million smartphones in 2019 in the US$300-to-US$399 price segment and more than 320,000 in the high-end US$750-plus segment in the same year. Huawei had some outstanding achievements as an Android manufacturer in Mexico, only beaten by Samsung in that year. Its strategy to access the market with a flagship phone will help HONOR differentiate itself from other Chinese competitors that are more focused on budget models and appeal to orphaned high-end Huawei users. But there are some questions. Is the new HONOR going to be credible for consumers? Are consumers willing to spend that sort of money on a brand that is still unknown by most?

When Huawei entered Latin America, it offered much cheaper devices than the competition and built its reputation over the years to reach new heights. HONOR intends to take advantage of Huawei’s image and lead with a flagship device. It sounds like a risky commercial strategy. But it is likely that HONOR will follow up by launching more accessible devices to generate the needed volume to fill its brand-new distribution centers with mid-range models. Huawei shipped more than 13 million smartphones in Latin America in 2019.

It is too early to tell if HONOR can make an impact in Latin America. At Canalys, we will monitor the vendor’s monthly performance in Chile, Colombia, Mexico and Peru. We will soon see how the HONOR 50 performs during the coming holiday season.