Chinese technology giant Huawei, well known as a major global producer of networking equipment and smartphones, has sought to diversify its business by moving into the cosmetics sector.
Hong Kong cosmetics company Bonjour Holdings issued an announcement on Tuesday evening, stating that its wholly-owned subsidiary company Bonjour Technology Services Ltd has entered into “a non-binding Memorandum of Understanding” with Huawei International Co Limited, also based in Hong Kong.
The agreement concerns “the application of retail technology to support the Group’s business transformation and sustainable development, and the launch of the cooperation between Bonjour Holdings and Huawei in joint brand marketing.”
Huawei agrees to provide small retail stores and technical support for Bonjour, including big data analysis, electronic payment, WIFI 6, and other solutions. Bonjour hopes that the number of its stores in mainland China will reach 3,000 in the next two to three years.
The document states that Hong Kong Huawei International Co., Ltd., a subsidiary of Huawei, will be responsible for the purchase and sale of communication products. Bonjour Holdings Limited is a Hong Kong-based investment holding company mainly engaged in the sales of beauty and cosmetics products.
Following this news, Bonjour Holding’s price on the Hong Kong Stock Exchange rose more than 110%. The share prices of other cosmetics and beauty companies also strengthened collectively on the Hong Kong Stock Exchange, with L’Occitane rising 14.84%. The Wind cosmetics and beauty index rose nearly 4%, setting a new five-year high, finance Sina reports.
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Time for a Makeover
Huawei has suffered from the intensifying friction between the US-led western world and China, which has seen it pushed out of its core telecommunications business in many national markets. The ongoing US-China trade disputes have also menaced or cut off crucial supplies including semiconductors and software.
After being banned by the Five Eyes alliance (Australia, Canada, New Zealand, the UK and the US) Huawei has now also been snubbed by the Indian government. India has banned the Chinese tech giant from taking part in the country’s 5G trials.
Despite its growth in China in 2020, the company stands on shaky ground in foreign markets. Competition from domestic smartphone makers such as Xiaomi, OPPO, and Vivo is becoming increasingly fierce.
It would seem that Huawei has decided to give itself a makeover by branching out into different sectors.