Between January and September 2024, in the list of top 10 companies making or assembling devices in Pakistan, the top eight are Chinese. In the competitive market for mobile phones, how did Chinese firms manage to establish such dominance across the border?

The strong political relationship between both countries is one part of it. In addition, Chinese consumer electronics brands extend their reach by also using popular culture.

The bilateral relations between China and Pakistan have been described as an “all-weather friendship” by both the countries. Despite terrorist attacks that have targetted Chinese personnel and project infrastructure in Pakistan, the leaders in both countries have remained committed to further strengthening the relationship.

Riding on the wings of this friendship, Chinese mobile phone companies ventured into the Pakistani market from 1998 and, over time, built a loyal consumer base.

The signing in 2015 of the China Pakistan Economic Corridor framework for regional connectivity provided a fillip to later entrants to solidify their operations.

Chinese companies hold an advantageous position in the mobile-phone sector, as their high numbers and globalised nature of operations have helped them grow as well as evolve in different markets.

Localising initiatives

Huawei had a head start, having begun its journey in the country from 1998. It claims to employ over 3,000 local workers. They form 91% of the company’s employees in Pakistan.

Huawei deepened its presence and association with the Pakistani government, by committing resources and partnering in areas ranging from rural connectivity and connecting overseas workers with their families through digital means, to developing solar power as well as conducting training programmes for youth in information and communications technology.

During Pakistan’s Prime Minister, Shahbaz Sharief‘s visit to China in June 2024, he visited Huawei’s headquarters to explore more collaborations and to allay fears about the security of existing Chinese investments in his country.

This deepening of relations with Huawei came out despite the allegations in 2021 that the company was spying and stealing sensitive data of the provincial Punjab government.

Other Chinese companies have followed Huawei’s lead in collaborating with Pakistan in its digital projects.

The companies have aligned themselves with the federal government’s programmes such as the “Made in Pakistan” initiative by setting up domestic manufacturing facilities. This followed the federal government’s Mobile Device Manufacturing Policy in 2020 to encourage local manufacturing and assembly of smartphone devices with 4G service technology, to reduce dependence on imports, boost local employment and to export manufactured products to other markets.

The policy also seeks to provide an alternate manufacturing base for Chinese investors in view of the adversarial trade relations with the US.

Chinese forays are not restricted to only mobile handset production and sales. Their presence also extends to its role as a service provider in network connectivity. China Mobile Pakistan, a 100% subsidiary of China Mobile Communication Corporation operates under the brand name, Zong.

In terms of mobile subscribers, Zong is the third-largest of the country’s mobile network providers, and second-largest for mobile broadband subscribers.

Popular culture

The Chinese consumer electronics brands extend their reach and become relatable through popular culture associations. While such localisation is the standard operating pattern for many foreign companies, the Chinese brands have realised its advantages more than others.

From sponsorships and advertisements in cricket, endorsements by celebrities, using festivals like Eid for special promotions, Chinese companies have chosen obvious entities of popular culture to build bridges with consumers across age groups.

They have associated themselves with initiatives that strengthen a collective sense of belonging, such as a campaign for women’s empowerment and an advertisement paying tribute to the Pakistani national anthem.

The advantage for Chinese companies in Pakistan is the strong political relationship between both countries. While India and its rise remains the geopolitical glue that keeps its two neighbours, the dominance of Chinese electronics brands also illustrates how bonds have been reinforced – through winning the confidence of the consumer.

Anand P Krishnan is a fellow at Shiv Nadar Institution of Eminence’s Centre of Excellence for Himalayan Studies in Delhi.