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Technically Speaking: Huawei’s S$54 Misadventure, and What Everyone Missed

Huawei has made the headlines again – though briefly for the better, it quickly descended into chaos widely reported by CNA, The Straits Times, and other online publications in Singapore and the region.

Image: Huawei Singapore

Here are the facts: the company released a promotion targetted at the “Merdeka Generation” – those aged 50 and above. They would be eligible to purchase the Huawei Y6 Pro 2019 for SGD 54, heavily discounted from a retail price of SGD 198.

The main issue was the fact that Huawei neglected to state that handsets were indeed very limited. The queue for the Y6 Pro started in the wee hours of the morning and quickly got out of hand, with many outlets announcing that all units were sold out hours before they even opened.

We are sorry. Our outlets are oversubscribed. Please refrain from joining the queues further as stores are likely to…

Posted by Huawei Mobile on Thursday, 25 July 2019

Huawei’s official apology.

An elderly woman was also reported to have passed out in the gathering crowd, with another lady arrested at Huawei’s JEM outlet store in Jurong East for refusing to leave the premises in protest.

Crowds took to Huawei’s Facebook page in anger, accusing its Singapore staffers of not anticipating the demand, and for not having “compassion” for the elderly. Several filial children surfaced their parent’s ailments and the fact that they had stood waiting in vain in spite of their condition.

Terms and conditions for the promotion. Image: Huawei Singapore

In all fairness, Huawei had allowed members of their public to queue on behalf of their parents if they presented their IC as proof of eligibility. They had also admitted, similarly via Facebook reply, that they had little oversight over the availability of the smartphone model in question, and stocks were limited.

Needless to say, that did little to assuage the crowd. Add the campaign’s focus on the elderly, along with the pseudo-patriotic tie-in with this year’s National Day celebrations, and it is easy to understand the overwhelming ire.

Was Huawei to blame?

On the surface, it’s just a marketing stunt gone wrong. The Y6 Pro 2019 might be a recent model, but it’s not been a best-seller prior to this debacle. Looking at the terms and conditions, Huawei had performed its due diligence in forewarning customers about limited stock availability and their ability to redeem handsets by proxy.

This means that legally, customers might find it difficult to seek recourse. If they had been aware of prior medical conditions (e.g. a recent knee surgery), friends and family could have redeemed the offer on their behalf.

The true issue is really mired in a he-said-she-said of store opening hours, handset availability and waiting time.

There’s a lot still kept under wraps by Huawei and the relevant authorities – key facts that would readily shed light on this debacle. How many total handsets were redeemed? How many stores were closed due to running out of stocks even before opening hours?

A portion of the Consumer Protection (Fair Trading) Act of 2012. Image: Singapore Attorney General’s Chambers (AGC)

The Consumer Protection (Fair Trading) Act of 2012 makes provision for the “unfair practice” for suppliers to “omit to do or say anything” in a consumer transaction, resulting in consumers being “deceived or misled”.

It might be easy to say that Huawei could and should have put the number of available handsets in the publicity material, but Huawei would have little reason to do so. For example, if some units suddenly became unavailable because of shipment delays, would Huawei then be liable for saying something that “misled” consumers?

Clearly, a blanket “while stocks last” clause serves this role much better. Furthermore, it probably helps that bit more to make a small-scale promotion go viral with the mistaken illusion that all customers will receive a handset for S$54. Huawei really has little more to gain from such an episode than more marketing airtime.

Customers who had been bamboozled by the company’s spurious claims really don’t have much of a case against Huawei. Lost hours from work? Injury from standing? Again – covered by Huawei’s all-encompassing legalisms that already informed customers that 1) units were limited and 2) the promotion could be claimed by proxy by presenting valid ID.

What could Huawei have done?

Many irate customers have come up with several suggestions, including listing the number of available handsets for redemption. We’ve addressed that one, along with the fact that proxy redemptions were possible.

In my uneducated opinion, the real issue lay in Huawei’s poor crisis management. With looming irate crowds (and concomitant PR disaster), it is clear that planned contingencies and on-the-ground crisis aversion was severely lacking.

Say Huawei is telling the truth and did not forecast the swarm of demand prior to the debacle. The lingering what-if would find a way to ensure that all these loyal customers willing to queue hours for their device would not go home empty handed.

Image: Dave Wu

Many had taken leave from their jobs, and most of the crowd were seniors above 50. All participants would reasonably back up Huawei amidst lingering tensions with the US threatening the company’s smartphone business. The last thing Huawei needed was for this remaining batch of customers to be antagonised.

Say you’re the country manager and you catch wind of the burgeoning, irate queues forming around the country, unable to obtain their phones. What would you do? Perhaps offer alternatives like last year’s models with roughly equivalent price tags with similar discounts? Perhaps issue coupons to those who have waited the longest so they can redeem the phone at a later date?

This way, you would avert a similar disaster by properly amassing the appropriate number of Y6 Pro units appropriate for the demand.

The company has announced (and shortly after, indefinitely postponed) an offer for the flagship Mate 20 Pro – going at SGD 568 down from the regular retail price of SGD 998. We’re not sure if Huawei Singapore will go ahead with their plan – but if they do, here’s to hoping it’s that bit better organised.

Ian Ling
http://uncommontragedy.com
Ian is the resident Tech Monkey and Head of Content at VR Zone. His training in Economics and Political Science is at the basis of his love for journalism and storytelling. A photographer by passion, and an audiophile by obsession, Ian is captivated by all forms of tech that makes enthusiasts tick.

7 thoughts on “Technically Speaking: Huawei’s S$54 Misadventure, and What Everyone Missed

  1. v_chen

    Prior to this from Huawei, another company, Xiaomi, did an online campaign in UK and the phones were sold out the moment the promotion started. Some developers in UK managed to fish out the codes and realized that the online campaign was programed to display ‘sold out’ the moment the promotion commence. Like Huawei, Xiaomi is a Chinese company. The common things here are:
    1. Highly attractive price reductions
    2. Immediate run out of stocks (perhaps not 100% for Huawei but many similar cases at various places where the first person in the queue couldn’t even buy the phone)

    Just to add, Huawei’s case was especially bad due to them making use of, or rather, preying, upon local sensitivities – the old folks and National Day. This indicated that business ethics at Huawei is highly lacking – the fact that such campaign, I reiterate, is something that has been approved at various levels.

    Ian, besides all these things on crisis management, and your attempt to justify their T&C, have you ever considered these factors I highlighted? How about this, is there a possibility that Huawei’s management intentionally created a campaign that was by design, to latch on local sensitivies in order to drive interest because they want to promote another product that is a lot more expensive?

    I was expecting you to also highlight the sensitivities – and the fact that such campaigns are not trivial things in a global company, and you seemed to have totally neglected them – so to speak. Or perhaps you just want to be nice to them and their so-called ‘due diligence’, hence it’s also the issue of the old folk’s (or the son’s and daughter’s) to not analyze and read the T&C?

  2. R6ex

    According to the singaporebudget.gov.sg website, “Merdeka Generation” refers to those born from 1 Jan 1950 to 31 Dec 1959 (i.e. 60 to 69 years old in 2019) i.e. Huawei’s 50 years old condition isn’t targeted at this generation.

  3. Ian

    @V_CHEN: Your in-depth response is spot on. However, it was never my intention to “justify” Huawei’s T&C. I only intended to bring greater clarity to the moralistic standpoints that have intensified due to the echo chamber effect of social media. Huawei is definitely to blame here with its poor crisis management and contingency planning, as I had mentioned in the article.

    @R6EX I stand corrected. The Huawei promotion was not targeted solely at said generation, but it was still included in the age range. Thanks for fact-checking!

  4. v_chen

    Ian, perhaps you are looking from a totally different vantage point, however, I don’t know what angle are you looking from to totally omit Huawei’s ignorance toward sound ethics here – never mind whatever echo chamber effect is coming from the Social Media. However, think about this, if Huawei has set out to intentionally run their campaign to exploit local sensitivities – they would have bet that the backlash might not be that great – and that maybe, the ‘material mindsets’ of Singaporeans will ultimately mute the backlash in one way or another. So why bother to put resources in mitigating the potential issues? If you are in the team of decision makers, and you are acutely aware of potential problems due to ‘ethical reasons’, you wouldn’t have allowed such campaigns to run in the first place – or at least ensure the marketing team have communicated clearly in the promotional materials, and not to mention, look to numerous examples on how to manage customer expectations. Remember, Huawei is a global company. But it was allowed run. That was clearly intentional. Huawei allowing ‘purchasing on behalf’, the so-called oversight, and apology? Nope, Singaporeans didn’t miss those. Huawei wanted attention and they got it, but it doesn’t deserve any ‘slack’.

  5. Ian

    @V_CHEN we’re sorry you read it this way. We stand to gain nothing by defending Huawei, and we have absolutely no intention to do so. What Huawei did was unconscionable, but this article merely serves to remind everyone that Huawei has done its baseline part to eliminate any legal responsibility for what has happened by clearly stating its t&cs. They’ve done the same as what innumerable companies have for their promotions and giveaways.

    We could add that perhaps even pinning moral blame on Huawei is difficult as we don’t know the circumstances. For example, by targetting 50-and-over customers, whose primary social media is Whatsapp and WeChat, it might be particularly hard to gauge response through metrics like shares, impressions and likes. That would make it difficult to prepare the appropriate number of handsets (transport of handsets costs money, too) and might explain the lacklustre performance by the company. In any case, we’d still reiterate what we observe to be poor crisis management and contingency planning. I highly doubt they wanted to make hundreds/thousands of elderly wait in a line for hours to no avail in a PR disaster of epic proportions, but it happened nonetheless. We can only wait for official statements from the police and from the Huawei itself to confer guilt (they have witheld comment so far). Remember: Singapore’s a country bound by laws and dur process. We are innocent unless proven guilty, but are free to boycott products and express our displeasure with our wallets. Looking forward to see what you think.

  6. V_Chen

    Ian, poor ‘crisis’ management in Singapore is not new. There has been a spate of them since years back. My point is, Huawei is a global company, not some local SME with extremely limited resources – (no I don’t intend to place SMEs in a lower class) but what defines a global company? A global company that doesn’t understand local sensitivities? Sound practice in the realm of visual communication is not some obscure thing that is so difficult to apply. Again, for a global company like Huawei, should I cut them some slack – perhaps those were ‘honest mistakes’? Seriously?
    As for the 50s and above – even though they may seem (perhaps through some statistics) to use a lot of Whatsapp and Wechat, a lot of information is not necessarily spread purely through these platforms. For sure their children, relatives will be aware and information will spread through various ways. I don’t know how well aware you are, but our 50s and above, they do know more than a thing or two in tech – themselves, their children, friends would’ve helped and updated them every now and then.
    Another thing, this is Singapore we are talking about, not another country, there are local mindsets and behaviours – the rush for goodie bags, for example – or the jokes on queuing, etc. These are actually part of our unique culture, or I should say, easily exploited culture. So, this is not exploitation?
    Now regarding pinning moral blame on Huawei – I reiterate, Huawei is a global company. Such campaigns must go through levels of approvals and no one ‘spotted’ the potential problems? ‘Oversight’ all the way? Their senior management, marketing, sales and visual communication teams are that incompetent – or ‘blur’? Really? Do you know that it is pretty basic to put up the number of available handsets – say, using smaller fonts?
    T&C – of course I am aware of it, so do many. For iphone launches – they do have their T&C too, don’t they – and so do other types of sales including those unrelated to tech. But for Huawei’s phone, who is to expect ‘while stocks last’ to be as low as zero. Zero means – even the first person can’t get it.
    The issue here is the context, i.e. global/world class company, with teams of professionals. And also, the consideration of our unique society, history, mindsets,etc. Then, this thing called ethics. Targeting those in the 50s and over, and creating the impression to ‘respect the elderly’ and leveraging on National Day – and hey those are all honest mistakes and they are innocent till proven? If I run such campaigns, I wouldn’t do that – that’s unscrupulous. And it’s not that there are no examples of well-run promotional campaigns.
    Come to think of it, we can both keep on highlighting our views, and I’m trying to understand your views. Really. But there’s nothing on ethics – or the highlight on major problems in the creation of this campaign of theirs. Perhaps we are from different eras, different experiences – different triggers for empathy.
    Anyway….

  7. @V_CHEN you’re absolutely right. It’s ridiculous that there seems to be so little oversight with regard to Huawei’s marketing activities here in Singapore. From my experience, it seems that radical, ostentatious campaigns are very much a global thing for the Chinese company. Just look at the global Mate 20 projection stunt late last year.

    However, Huawei Singapore also has significant autonomy with regard to its activities if I’m not wrong. They had given away power banks to the thronging queues at the last iPhone launch with a note “apologising” for the inferior battery life of the Apple-made device last year too.

    This exchange has actually led to a realisation on my part – that few other manufacturers have directly sanctioned promotions of this sort. They’re usually carried out by third-party retailers and dealerships that insulate any PR repercussions. This means that they really should have watched their step extra carefully since their brand name was directly at stake.

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