Despite numerous political and economic barriers, China’s ZTE recently announced robust financial results for the first half of 2022, reporting 12.7% growth in operating revenue. How has ZTE successfully built up its business in the current VUCA environment? It may be time to objectively review how the company has evolved and what lessons may be gleaned from its journey.
ZTE’s resiliency-oriented strategy for growth
The first key to the company’s success has been a resiliency-oriented strategy. Today, without a doubt, information and communication technology has become the key driving force in the booming digital economy for enriching people’s lives, accelerating the digital transformation of industries, and promoting economic growth. ZTE has introduced various innovations for simplified infrastructure and efficient and intelligent operations and agile innovations for achieving growth in the second curve of digital services. ZTE has also adopted scenario-based approaches to realize the ultimate experience and efficiency, promoting sustainable development and future technological advancements.
“Digitalization is continuously strengthening the “immune system” of our society, tackling not only the current pandemic but also promoting sustainable development, while telecommuting, online collaboration, and smart manufacturing are safeguarding people’s life,” Mr Xie Junshi, EVP and COO of ZTE commented.
To cope with the challenges brought by the COVID-19 pandemic with innovative ICT technologies and facilitate the digitalization and low carbonization of the industry for the healthy development of the economy, ZTE has carried out in-depth cooperation in digital infrastructure construction, digital industry development and more with its global partners.
Xu Ziyang, ZTE’s CEO, was recently awarded the Outstanding Contribution to the Asia Mobile Industry Award at the GSMA’s Asia Mobile Awards (The AMOs) 2022 in Hong Kong. This is another recognition of ZTE’s success in the industry.
Supply chain resiliency
ZTE has also recognized that its supply chain’s resiliency, security and stability are foundational, working vigorously to realize continuous delivery to its global customers and steadily improve the company’s operational quality and efficiency.
Second, the company has also been committed to strengthening its end-to-end R&D investment and innovations. In the first half of 2022, the company’s R&D spending reached RMB 10.15 billion, accounting for 17.0% of its total operating revenue. Additionally, while pursuing business development, ZTE has taken an active part in developing the digital economy by promoting green operations, green supply chain, and green digital infrastructure and empowering the green development of industries, thereby facilitating the sustainable development of operators and verticals. In August 2022, ZTE was named in Fortune China’s ESG Influential List, a ranking that aims to recognize the Chinese companies shouldering environmental, social and corporate governance responsibilities, in addition to creating wealth.
Ensuring sustainable business
Finally, a company also needs to ensure that its business is sustainable in the long term. ZTE’s global expansion is a key factor toward this end. With a presence in more than 160 countries and regions, ZTE cooperates with more than 110 5G carriers worldwide, covering major markets, including Europe, Asia Pacific, and the Middle East. The company has built commercial 5G networks for Hutchison in Austria, Orange in Spain, WindTre in Italy, AIS/TRUE in Thailand, and multiple carriers in China.
Like many Chinese companies, ZTE’s overseas strategy aims to establish a presence in developing markets worldwide as a first step to accessing the developed market in Europe. ZTE’s internationalization began in 1998 when it signed a ‘turnkey’ contract with Pakistan Telecommunication Company Limited (PTCL) for the switching and transmission of 266,000 lines in Islamabad.
Despite the rocky road ahead, the company remains committed to its overseas strategy. Based on a global marketing network built over more than 20 years of experience, ZTE has established a solid reputation among customers globally, cooperating with over 500 carriers and providing quality networks and efficient services to over two billion users worldwide.