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215governance; without a sufficient number of properly trained, competent and essentially incorruptible civil servants, none of the other SDGs can be achieved.
The importance of public administration is reflected in the annual UN government awards for innovation in public administration. In particular, innovations that support the SDGs and improve the lives of citizens are particularly recognized. The awards are divided into five categories.
Category 1 : Provision of inclusive and equitable services
Category 2: Ensuring integrated approaches in public sector institutions
Category 3 : Development of effective and responsible government institutions.
Category 4: Facilitating digital transformation in public sector institutions.
Category 5: Promoting Gender-Sensitive Public Services to Achieve the SDGs.
For innovative services designed to benefit ordinary citizens and those who are often marginalized in their communities, the awards also recognize the ways in which the 17 SDGs can be implemented in communities around the world.
The problem of achieving the SDGs is relevant both within the framework of the international agenda and in connection with the tasks of the socio-economic development of the Russian Federation. Russia actively participated in shaping the UN sustainable development agenda, taking into account its priorities, such as
promoting sustainable industrial development, ensuring road safety, promoting healthy lifestyles, combating noncommunicable diseases, expanding reliable access to basic energy services, transport, education, health care, social protection [3].
Conclusions. Sustainable development is a new paradigm for the development of mankind and the planet accepted by the world community without any alternative. The key to effective governance and achieving goals is to think globally and act locally using cutting edge technologies and governance practices that involve the community in their design and implementation. At the center of it all are competent, honest, motivated civil servants.
References
1. Повестка дня в области устойчивого развития [Электронный ресурс]. - Режим доступа: https://www.un.org/sustainabledevelop-ment/ru/about/development-agenda/
2. Massey, A. (2019). Editorial: Innovation in public administration to leave no one behind. Public Money & Management, 39(7), 455457. doi:10.1080/09540962.2019.1665377
3. Сахаров А., Перспективы реализации Целей устойчивого развития ООН в России / А. Сахаров, О. Колмар // Вестник международных организаций: образование, наука, новая экономика. 2019. №1. URL: https://cyberleninka.ru/article/n/perspek-tivy-realizatsii-tseley-ustoychivogo-razvitiya-oon-v-rossii (дата обращения: 14.06.2021).
MARKETING RESEARCH OF CHINESE COMPANIES XIAOMI AND HUAWEI IN THE RUSSIAN
MARKET: FINDINGS AND CONCLUSIONS
Grigan N.
Master's degree student Shanghai University, SILC Business School
ABSTRACT
The article focuses on the analysis of the current marketing situation and consumer opinion related to the activities of Chinese companies Xiaomi and Huawei in the Russian market. It is based on the questionnaire study conducted with 325 participants from several major cities in Russia, which sought to measure indirect factors influencing the planning of strategic management with the effect on the consumer purchase decisions. The study also revealed the attitude of consumers towards some strategic future plans of Huawei and Xiaomi both in the global market in general, and in the Russian market in particular, which has not been done in previous research. Thus, the results and conclusions presented in the paper are of both theoretical and practical significance in terms of a more profound understanding of marketing situation in the Russian market that both Huawei and Xiaomi are currently in.
Keywords: marketing analysis, Xiaomi company, Huawei company, "Digital Silk Road".
Introduction
The global smartphone market is considered to be fast-growing with a highly intense level of competition. Under the pressure of such severe rivalry, some companies are starting to exit the market (e.g., LG) [1]. The specificity of the smartphone market is an increase in the extent of homogeneity of smartphones characterized by a reduction in the variety of the technical and functional parameters of smartphones from different manufacturers. Thus, this kind of situation requires companies to pay more attention to their marketing
strategy and brand image in order to achieve success and survive the competition. The smartphone market is crucially related to the IoT market, which has been developing rapidly in developed countries, but which is still underrepresented in Russia, thus having a huge potential of success among Russian consumers who are willing to catch up with the trend [2]. Having said that, we can conclude that those companies who succeed in conquering the biggest audience in Russia with their smartphone product - which is the basic tool that controls the other products of IoT connecting them together
- could use the momentum to establish their IoT supremacy in the future booming market. Thus, the importance of a suitable marketing strategy in the Russian market for Chinese companies Huawei and Xiaomi is undeniable.
This article concentrates on two global Chinese companies operating in the Russian market - Xiaomi and Huawei. The two companies have been thriving for some time, but new times have brought new challenges: sanctions from the US government, economic instability in different parts of the world due to the coronavirus pandemic, and, specifically in the Russian market, the challenge brought by Samsung who is again at the top of the sales in Russia, leaving Xiaomi and Huawei behind [3]. These factors call on the rethinking of the marketing strategy in the Russian market which could be achieved through the marketing research via questionnaire method.
The importance of such research conducted on the Chinese companies operating in the Russian market goes beyond the boundaries of the mobile phones industry. The two companies, and particularly Huawei, might play an important role in implementation of the "One Belt, One Road" initiative, which also includes "Digital Silk Road", in Russia, one of the most important transit member countries of the Chinese project, having the potential of combining this project with Russia's own EAEU initiative [4].
Literature Review
The scientific interest in the topic of marketing strategies of Huawei and Xiaomi in the Russian market has been growing during recent years, but is still scarce compared to analyses of the prominent Chinese companies' operations in other parts of the world.
Russian scholars Markova V. D., Tzinlin M., Ge C. [5] have first examined the overall marketing strategy of Huawei company which is also implemented in Russia. The authors conclude that Huawei's marketing strategy focuses on generating a premium brand image, which is related to the usage by the company of a multibrand strategy for different market segments with different price perception and needs. Liu Ning [6] examined Huawei's international marketing strategy (including Russian market) through the SWOT-analysis identifying strong points of the company (such as progressive technological innovation and exceptional scientific development strategy), weaknesses (which, according to the author, include insufficiency of experience in competition on the global scale), and in addition opportunities (government support, the proliferation of Internet technologies and globalization of the market) and threats (which have their roots in intense trade competition and emerging barriers). When it comes to Xiaomi, we can outline the work of Glazyrina, O. [7] who has defined the main results of Xiaomi's marketing strategy having formulated the key conclusions related to the company's operations in the Russian and global markets. Kulikova, O. and Suvorova, S. [8] continued the research on the current marketing state of affairs of Xiaomi and Huawei companies. The scholars have conducted a marketing research of the mobile phone industry in Russia, which helped them
define the modern customer's picture and arrive at several practical conclusions. However, the research does not reflect all the factors influencing the consumer choice. In addition, the research was not focusing particularly on the Chinese companies, thus lacking the required questionnaire parts devoted to the specific features of Xiaomi and Huawei.
Thus, the marketing research introduced in this paper is aimed at filling the gap, and is supposed to present a thorough analysis of the current marketing situation of Huawei and Xiaomi in the Russian market.
When creating the questionnaire, several works were used as a methodology foundation for the survey. For example, the ideas on measuring brand familiarity were found in the paper of Laroche M., Kim C., Zhou L. [9] Likewise, Nor Sara Nadia Muhamad Yunus and Wan Edura Wan Rashid [10] have provided a sufficient example of measuring the influence of Country Image, Product Quality and Brand Familiarity on the purchase decision. Also, in order to measure the effect of product knowledge and product involvement on the consumer purchase decisions, the study of Khosrozadeh Shirin and Heidarzadeh Hanzaee Kambiz [11] was utilized. Lastly, the work of Aaker A. D. [12] was employed to grasp the influence of perceived quality of a product.
Main Body
One of the most important indirect factors influencing the planning of strategic management are: Perceived Quality of manufactured products, Image of the producing country, Brand recognition, Perceived value of manufactured products, Customer loyalty, Competence of the company, Honesty, Corporate reputation and Manipulative intention, according to the classification scheme for the factors developed based on the results of the study of the factors affecting the strategic management of the organization [13]. Thus, the questionnaire presented in this study attempts to measure the mentioned indirect factors influencing the planning of strategic management with the effect on the consumer purchase decisions of Russian consumers.
To conduct a survey, a questionnaire was developed, which included 53 questions, of which 3 were open. The questionnaire was created using the Internet-based document service Goggle in the Form section and distributed via direct mail to respondents. The survey was conducted in the cities of Moscow, St. Petersburg, Rostov-on-Don, Krasnoyarsk, Kazan, Stavropol, Smolensk, Samara, Ulyanovsk. 325 people have participated in the survey. The answers of 3 respondents have been cancelled due to the incorrect filling of the questionnaire. To process the results of the questionnaire, a computer program for statistical processing of SPSS data was used.
The first part of the questionnaire was related to the personal info about the respondent. The respondents were citizens of various cities in Russia of different age, education background and occupation, which made it possible to grasp the overall marketing opinion about the two companies existing now among Russian consumers.
The second part concentrated on the Image of the producing country. It was found that although the majority of the respondents undoubtedly agree that the
level of economical development and industrialization of China is high, the quality and reliability of Chinese product is still perceived to be relatively lower. However, we can conclude that the situation is changing and
Russian consumers start to see products made in China as more reliable and of greater quality than, say, a decade ago.
Fig. 1.
The China's product quality is at a high level (1 meaning "totally disagree " and 5 meaning "totally agree ")
The third part examined the brand familiarity amid the participants of the survey. The percentage of respondents spread evenly across different rates of familiarity with both Huawei and Xiaomi, thus we could state that our research captures the different layers of customers with both poor and excellent degree of brand familiarity.
The next section was devoted to the Perceived Quality of manufactured products. According to the replies of the surveyee, the average Russian consumer is
overall satisfied with the quality of Huawei's and Xia-omi's products, but lacks better service support which would be offered in Russia to those who encounter certain problems related to the usage of products of the two Chinese companies. At the same time, we can see that consumers believe that Xiaomi and Huawei have the competence to satisfy their needs while simultaneously striving after continuous innovation. In addition, most respondents assume the two companies to possess a good reputation in the market and to have a long-term interest in their customers.
Fig 2. If you have ever used Huawei services (for example, repairs in official stores), how would you rate the quality of this service? Please skip if you don't have a similar experience. (1 being "extremely poor service" and
5 being "excellent service ")
Next question of the survey looks into one of the most important spheres of Huawei's business operation - the building of 5G infrastructure. As we know, recently Huawei company has been banned by several western countries from the access into their 5G infrastructure market, thus diminishing the brand image in those countries and making Huawei "an outlaw". This situation prompts the Chinese company to concentrate its attention on the markets of other countries which are
more favorable towards the company. Our questionnaire results furthermore prove the fact that Russian market is more accessible for Huawei compared to markets of various western countries, as the majority of respondents confirmed their approval of the strategic aim of Huawei company to build the united digital society and space in Russia, which consequently includes the plans of building 5G infrastructure in Russia.
137(42,5 %)
Fig 3. Do you approve of the strategic goal of the Chinese company Huawei to build a unified digital society and space in Russia (for example, plans to build 5G infrastructure in Russia) ?
One more important aspect that was explored in the survey is the determination of Huawei to build its own operation system in order to discontinue usage of the US-led Android system. Some experts expressed doubtful opinions about this plan, stating that this kind of decision would repel customers who constantly use Google services and are overall satisfied with the Android system. Nevertheless, our results show that the
majority of the respondents support the idea or are neutral about it. Thus, when implementing this decision of giving up Android system, we would advise Huawei company to start this plan's execution in the Russian market in addition to other similar accepting markets when it comes to welcoming such drastic alterations.
150
100
107(33,2 %)
1 2 3 4 5
Fig 4. How do you feel about Huawei going to ditch the Android system and switch to its own operating system?
The research also took a closer look at the key features of Xiaomi company. For example, one of the key characteristics of the company is its ecosystem "Mi Jia". Through this ecosystem, Xiaomi sells various smart devices and accessories. However, although extremely developed in China, the concept is still not known to many potential customers who are abroad. The survey revealed that among Russian customers only less than half know about Xiaomi's ecosystem
(particularly Xiaomi's "smart home" concept). At the same time, the vast majority of respondents highly approve of such high-tech notion being realized by the Chinese company. Thus, we can conclude that great potential in the Russian market for the promotion of Mi Jia ecosystem is still not fully realized, and it would be advised to adjust Xiaomi's marketing strategy in Russia to wholly capture the prospective and currently undeveloped market in time.
Fig. 5. Do you know about the Smart Home concept from Xiaomi? (Blue stands for "Yes, I know ", yellow sta nds for "Difficult to say", red stands for "No, I've never heard of it").
Fig. 6. How do you feel about such concept from Xiaomi (Smart Home) ? (1 being "Very negative" and5 being "Verypositive")
Conclusion
The study presented in this article used questionnaire method in order to analyze indirect factors influencing the planning of strategic management: Perceived Quality of manufactured products, Image of the producing country, Brand recognition, Perceived value of manufactured products, Customer loyalty, Competence of the company, Honesty, Corporate reputation and Manipulative intention. In addition, some important strategic decisions of the two Chinese companies have been examined. As a result, we could put forward several propositions concerning the improvement of the efficacy of marketing strategies of Huawei and Xiaomi in the Russian market.
First, the survey results showed that although overall Russian consumers have a high opinion of the level of development of China, the perceived quality of Chinese goods still has a potential to grow. To quicken the process of improving the image of Chinese products among Russian customers, it would be advised to develop better customer service support in Russia both for Huawei and Xiaomi companies, as it became apparent that this is the main weak point that contributes most to the holding back of the Image of the producing country factor index increase.
Second, based on the survey results, the majority of Russian customers approve of the strategic initiative
of Huawei company to build 5G infrastructure in Russia. This finding is especially important in the light of international "boycott" of Huawei by the majority of western countries induced by fears for their national security. As we can see, this is not the case with either the Russian government policy, which is also currently experiencing a turn toward East prompted by the more deepening worsening of bilateral relationships with the west, or with the Russian audience, which sees the prospect of Huawei building the digital space in Russia as a good opportunity to gain access to the latest technologies in a faster manner. Thus, we would advise Huawei to concentrate more of its resources on the Russian digital space market, which possesses both great potential for investment and at the same time features greater inclinations to cooperate with Chinese companies in such delicate spheres as country digitalization than most of the other European countries do.
Third, the questionnaire study revealed that, when it comes to Xiaomi "Mi Jia" Smart Home concept, more than half of Russian consumers either have not heard about it or are not sure whether they have heard about it or not. However, the was majority of respondents have expressed their favorable attitude towards the Xiaomi ecosystem, which represents a potential gap in the Xiaomi marketing strategy in Russia, which resulted in the insufficient product knowledge level among consumers. This situation could be explained by
the limited advertisement channels launched by Xiaomi in Russia. Previously, the company used exclusively minimalist marketing strategy owing to the cost leadership business strategy that Xiaomi has chosen. As a consequence, Xiaomi rejected traditional marketing and employed social media marketing. However, some time ago the company started to adjust its advertising strategy in some regions, in China, for example, by adding traditional marketing. This case shows that the strategy should also be rearranged in the Russian market as well, aiming at increasing product knowledge level among consumers to grasp wider audience.
We believe that by implementing these propositions, the two Chinese companies could enjoy better success in the Russian market and would be able to surpass Samsung company as a sales leader. What is even more important in the long-term, the right adjustment of marketing strategy would enable Xiaomi and Huawei to gain a strong foothold in the IoT sphere in the future market with high potential.
References
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2. Kitaev A.E., Mironova I.I. 2019. Smart home market in Russia: An empirical study of consumer preferences. Vestnik of Saint Petersburg University. Management 18 (2): 204-234. https://doi.org/10.21638/11701/spbu08.2019.203
3. Russian Smartphone Market Sags in Fourth Quarter 2020 (2021, February 18). International Data Corporation (IDC). https://www.idc.com/get-doc.j sp?containerId=prEUR247475421
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5. Markova V. D., Tzinlin M., Ge C. Marketing Strategies of Smartphones Producers. World of Economics and Management, 2017, vol. 17, no. 4, p. 158167. (In Russ.)
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13. Grigan S., Grigan N. Factors Affecting the Strategic Management of the Company: Classification and Characteristics. Modern engineering and innovative technologies, 2021, Issue 13, Part 1, pp. 95-105.
АНАЛ1З СТАНУ ТА ТЕНДЕНЦ1Й РОЗВИТКУ С1ЛЬСЬКИХ ТЕРИТОР1Й УКРАШИ В УМОВАХ СУЧАСНИХ ГЛОБАЛЬНИХ ВИКЛИК1В НА ОСНОВ1 ОБРОБКИ СУПУТНИКОВИХ
ЗН1МК1В З ВИКОРИСТАННЯМ Г1С
Николюк О.М.
д. е. н., доцент, заступник директору центру iнформацiйних технологш, Полiський нацiональний
yHieepcumem, Житомир, Украна Пивовар П.В.
к. е. н., доцент, доцент кафедри мiжнародних економiчних вiдносин та европейськоЧ ттеграцИ,
Полiський нацюнальний утверситет, Житомир, Украна
ТопольницькийП.П.
к. т. н., доцент, доцент кафедри комп 'ютерних технологш i моделювання систем, Полюький нацiо-
нальний yнiверситет, Житомир, Украша
Данкевич В.€.
д. е. н., професор, декан факультету права, пyблiчного управлтня та нацюнально'1 безпеки, Полiсь-
кий нацюнальний yнiверситет, Житомир, Украна
