Huawei teams up with Vanke to tap into the trillion-dollar market.

Author: Cao Anxun

Editor: Zhou Zhiyu

In recent years, while busy promoting platforms like Aito for "Huawei series" cars or introducing Huawei's HarmonyOS ecosystem, Richard Yu, who rarely appears at a signing ceremony with real estate developers, was seen standing next to Yu Liang, who has not made a public appearance for almost three months.

Recently, Huawei and Vanke signed a strategic cooperation agreement for full-house intelligence. According to the agreement, both parties will explore new ideas for the development of the real estate industry and enhance the digital attributes of building facilities. At the same time, they will collaborate in areas such as smart cities, smart communities, and full-house intelligent solutions.

The joint appearance of these two big shots is definitely not a trivial matter.

As the real estate industry undergoes profound adjustments amidst the rising tide of intelligence, a cross-border integration revolution is imperative. Yu Liang, Chairman of Vanke Group, and Richard Yu, Executive Director and CEO of the Consumer Business Group of Huawei, understand this well. They aim to join forces beyond the traditional development market to tap into the trillion-dollar blue ocean market of smart buildings and digital home industry ecology.

Huawei and Vanke will work together to create more intelligent spatial solutions in various formats and projects such as residential areas, hotels, office areas, commercial buildings, sales offices, businesses, and parks, and promote them nationwide.

This strategic cooperation is a comprehensive deepening of their previous collaboration. Huawei has been involved in full-house intelligent solutions as early as 2019. After five iterations, Huawei released the Full-House Intelligent Solution 5.0 at the end of November last year. At the press conference, Richard Yu stated that Huawei Full-House Intelligent 5.0 is the preferred choice for high-end home decoration.

With the strategic cooperation in place, Vanke's ambition to join forces with Huawei to tap into the new blue ocean of full-house intelligence is becoming increasingly apparent.

Global market research firm Marketsand Markets predicts that the global smart home market will grow from $78.3 billion in 2020 (approximately RMB 563.3 billion) to $135.3 billion in 2025 (approximately RMB 973.3 billion), with a compound annual growth rate of 11.6%.

Due to the increasing number of new residential projects and the upgrading demand of the real estate industry, the smart home market in the Asia-Pacific region is expected to grow rapidly during the forecast period.

According to the consulting firm AVCLOUD, by 2026, the household penetration rate of smart homes globally will reach 25%, and the market size will increase to RMB 1.4 trillion.

Tech giants such as Amazon, Apple, Google, Huawei, Xiaomi, LG Electronics, and Sony, both domestically and internationally, have set their sights on this trillion-dollar track, continuously investing in the smart home market, upgrading smart home solutions, or related products.

However, as Shao Yang, President of Huawei's Full-House Intelligent Product Line, pointed out, no manufacturer worldwide has truly opened the door to "space intelligence." Shao believes that "Huawei has the opportunity to break through this door with its own technology and accumulation." With the backing of the world's largest real estate market, Huawei is poised to compete with other tech giants in the smart home sector, leveraging the advantage of being "near the water with a tower." The HarmonyOS ecosystem, with over 800 million devices, is Richard Yu's "weapon" for delving deep into the smart home field.

Industry insiders believe that the real estate sector provides a good landing scenario and a vast market for smart home products. The collaboration between Huawei and Vanke is a powerful alliance. Empowered by Huawei, Vanke can enhance its product competitiveness and make a mark in the whole-house smart market.

Jiang Han, a senior researcher at Pangu Think Tank, analyzed that for Huawei, cooperating with Vanke can further expand its terminal business into the real estate sector. At the same time, Huawei can better understand the smart needs of the real estate industry, laying a solid foundation for future development.

In fact, by 2024, including Vanke, Huawei has been intensively attracting real estate companies, leading more of them to choose Huawei's smart solutions.

On January 10th, Huawei gathered several Beijing real estate companies including Zhongjian Zhidi, Zhongjian Jiuhé, Shoukai Real Estate, and Poly Real Estate to share insights on whole-house intelligence. On January 17th, Huawei signed a strategic cooperation agreement with Zhujiang Group, prioritizing the use of Huawei's whole-house smart solutions in projects such as Zhujiang Group Financial City One, Lijiao Redevelopment, and Zhenlong Redevelopment.

This will help Huawei boost its terminal business and continue the momentum of performance recovery.

In the first half of 2023, Huawei achieved sales revenue of 310.9 billion yuan, a year-on-year increase of 3.1%, with a net profit margin of 15.0%. Among them, terminal business revenue was 103.5 billion yuan, a 2.2% increase year-on-year. Huawei's rotating chairman Hu Houkun wrote in his 2024 New Year's address that the company's operations have basically returned to normal, with sales revenue expected to exceed 700 billion yuan in 2023.

Amid the weak recovery of the real estate sector, the increased investment by tech giants like Huawei not only boosts market confidence but also helps real estate companies explore new "Shangri-La" beyond the trillion-dollar traditional development industry, a world filled with intelligence, big data, and cloud computing.

In the journey of exploring new models for the development of the real estate industry, how technology can enhance people's sense of well-being in their living environment is a question that both real estate giants and tech giants must answer together.

For the real estate and tech industries, this is an exciting cross-border journey.