Consumer Electronics / SemiconductorsChina
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JOURNEY · DETAIL
Ren Zhengfei of Huawei: From Reselling Switches in Nanyou New Village, Shenzhen, to a Global Telecom and Smartphone Giant
Founded: Ren Zhengfei · Huawei Technologies Co., Ltd.
JOURNEY
Key Fields
FIELD STAMPSIndustryConsumer Electronics / Semiconductors
RegionChina
ScaleGiant
ChannelB2B
Origin
Ren Zhengfei was born in Guizhou in 1944 and enrolled at the Chongqing Institute of Architecture and Engineering in 1963. After graduation, he joined the military as an infrastructure engineer, retiring in 1982 to work for an electronics company under the Shenzhen Nanyou Group. In 1987, he was forced to leave after being defrauded in a business deal that caused losses to the company, leading him to start his own business. On September 15 of the same year, he founded Huawei in a residential building in Nanyou New Village, Shenzhen, with a registered capital of 21,000 RMB. The initial business involved selling and assembling telephone switches, starting by reselling switches from Hong Kong-based Hongnian Company to earn a price difference, thereby securing his livelihood and seizing the gap in China's telecommunications infrastructure construction.
Milestones
1987
Inception Failure
While serving as a manager at an electronics company under Nanyou Group, Ren Zhengfei encountered a business fraud that caused losses to the company, forcing his resignation. This career setback directly led to the founding of Huawei, though it placed immense pressure on Ren during the early stages. When the company was established on September 15, 1987, the registered capital was only 21,000 RMB, and the office was located in a residential building in Nanyou New Village, Shenzhen. It survived initially by reselling switches from Hong Kong's Hongnian Company.
1990
Transformation Turning Point
In 1990, Huawei shifted from simple reselling to independent R&D. Realizing that reliance on imported products led to thinning margins and external dependency, Ren decided to bet on self-developed digital program-controlled switches. Around 1993, the C&C08 digital switch was launched, which gained market share in rural and third/fourth-tier city telecom bureaus through price and service advantages, establishing Huawei's foundation in the telecom equipment sector.
1996
Institutionalization Inflection Point
Huawei began drafting the 'Huawei Basic Law.' Ren Zhengfei emphasized internally, 'What will we do if one day the company's sales and profits decline, or even if we go bankrupt?' In 1996, the company's revenue reached approximately 2.6 billion RMB. That same year, Huawei began entering overseas markets, though early internationalization was difficult, with years of losses in markets like Russia before finally gaining traction after 1998.
2000
Rapid Growth Growth
In 2000, Huawei's sales revenue reached 15.2 billion RMB, with overseas market revenue at approximately 100 million USD. Ren Zhengfei was ranked 3rd on the Forbes China Rich List with a net worth of about 500 million USD. However, as the IT bubble burst that same year, Huawei's growth slowed. Ren published 'Huawei's Winter' internally, warning of the risks of blind expansion and beginning to scale back non-core businesses.
2003
Global Expansion PMF
The lawsuit between Huawei and Cisco in 2003 drew global attention, eventually settling with Huawei modifying its source code. Objectively, this lawsuit increased Huawei's international profile. In 2004, Huawei's overseas revenue exceeded domestic revenue for the first time. By 2005, global sales reached approximately 8.2 billion USD, and Ren Zhengfei was named one of Time Magazine's 100 most influential people as a 'Builder and Titan,' the only representative from a Chinese company. This phase lasted from 2003 to 2005.
2011
Terminal Transformation Inflection Point
In 2011, Huawei's revenue reached 199 billion RMB, making it the world's second-largest telecom equipment manufacturer. However, the consumer business had long relied on carrier-customized phones, resulting in weak brand identity and low margins. After Richard Yu took charge of the consumer business in 2011, he cut a large number of white-label models and shifted to high-end proprietary brands. The 2012 launch of the Ascend P1 failed to make a high-end impact, but the 2013 Ascend P6 sold over 4 million units, beginning to establish terminal brand premium. This phase lasted from 2011 to 2013.
2019
Sanction Crisis Failure
In 2019, the U.S. Department of Commerce added Huawei to the Entity List, banning U.S. companies from supplying chips, software, and other key components. Huawei's smartphone business suffered a sharp decline. Although 2020 revenue hit a record high of 891.4 billion RMB, the overseas smartphone market essentially vanished. Huawei was forced to sell the Honor brand to survive and accelerated the independent development of the HarmonyOS and HiSilicon chips.
2021
Rock Bottom Failure
In 2021, Huawei's revenue dropped to 636.8 billion RMB, a decrease of approximately 254.6 billion RMB (about 28.6%) from its 2020 peak. The smartphone business fell out of the global top five, and Kirin chip production ceased due to the cutoff from TSMC, forcing reliance on Qualcomm 4G chips for certain models. Ren Zhengfei emphasized in internal meetings that 'everyone must feel the chill,' as the company entered 'extreme survival mode.'
2023
Counterattack Growth
In 2023, Huawei released the Mate 60 series, equipped with the self-developed Kirin 9000S chip, signaling the initial restoration of the chip supply chain. Revenue rebounded to approximately 860 billion RMB in 2024 and grew further to 880.9 billion RMB in 2025, with a net profit of 68 billion RMB, the second-highest in history. The company has about 213,000 employees and operations in over 170 countries and regions. By 2026, native HarmonyOS installations exceeded 37.26 million, with 276 million monthly active smartphone devices. This phase lasted from 2023 to 2025.
Turning Points
- Shifted from reselling switches to independent R&D of the C&C08 digital switch, using low prices and rapid service to open up the domestic county-level telecom bureau market.
- Launched the 'Huawei Basic Law' in 1996, replacing personal authority with institutionalized management to support subsequent large-scale expansion.
- After settling with Cisco in 2003, Huawei gained international exposure, and overseas revenue surpassed domestic revenue for the first time.
- In 2011, Richard Yu cut carrier-customized white-label phones to pivot toward high-end proprietary brands, extending from B2B equipment to B2C terminal brands.
- The 2019 Entity List blockade forced a full-stack independent replacement of HiSilicon chips and HarmonyOS, with the 2023 Mate 60 series reversing the downward trend.
Failures & Pitfalls
- Ren Zhengfei's forced resignation due to business fraud at Nanyou Group served as the direct catalyst for his entrepreneurship.
- Early internationalization was slow, with years of losses in markets like Russia and frequent changes in leadership.
- The 2012 failure of the Huawei Ascend P1 to penetrate the high-end market due to insufficient brand premium and channel capabilities.
- After being added to the Entity List in 2019, the overseas smartphone market nearly vanished, forcing the sale of the Honor brand to survive.
- In 2021, revenue fell by 254.6 billion RMB from the 2020 peak, the smartphone business dropped out of the global top five, and chip supplies were completely cut off.
关键成功要素
- Started with 21,000 RMB in registered capital, entering the telecom equipment track by reselling switches.
- Bet on the self-developed C&C08 switch, using cost-effectiveness and personalized service to penetrate county-level markets ignored by foreign firms.
- Established a sharing mechanism and institutionalized management through the 'Huawei Basic Law' to support a workforce of 210,000.
- The Entity List forced full-stack independence for HiSilicon and HarmonyOS, completing supply chain reconstruction through 'extreme survival mode.'
- Shifted terminal business from carrier white-labeling to high-end proprietary brands, opening up the global consumer market.
Lessons
- No matter how profitable agency business is, one must transition to independent R&D, or remain forever dependent and lack pricing power.
- Early losses in internationalization are normal; what determines success is the ability to continuously learn from mistakes and accumulate organizational capabilities in a market.
- True high-end brand building cannot rely on carrier channels; it requires self-built branding, channels, and product definition capabilities.
- Sanctions are an extreme test imposed externally; only long-term investment in underlying technology can turn a crisis into an opportunity for supply chain reconstruction.
- Managing a large-scale organization through systems rather than personal authority is the only way to continue expansion after the founder steps back.
Core Data
- 2025 Revenue：880.9 billion RMB (based on public data, not independently verified)
- 2025 Net Profit：68 billion RMB (based on public data, not independently verified)
- 2021 Revenue Low Point：636.8 billion RMB (based on public data, not independently verified)
- 2020 Revenue Peak：891.4 billion RMB (based on public data, not independently verified)
- Approx. Number of Employees：213,000 (based on public data, not independently verified)
- 2026 Native HarmonyOS Installations：37.26 million units (based on public data, not independently verified)
- 2026 Monthly Active Smartphone Devices：276 million units (based on public data, not independently verified)
- 1987 Registered Capital：21,000 RMB (based on public data, not independently verified)
Competitors / Peers
In the telecom equipment sector, Huawei benchmarks against Ericsson and Nokia. Ericsson has long excelled in standardized patents and the European installed base, while Nokia remains competitive in access networks and optical transmission. However, Huawei continues to capture global carrier market share through faster product iteration, lower cost structures, and stronger customer service. In the smartphone terminal sector, Apple controls a closed ecosystem and high-end brand appeal, while Samsung possesses the advantage of full-chain component self-sufficiency. Huawei has achieved differentiation through the HarmonyOS ecosystem and imaging systems, but remains limited in overseas market expansion due to the lack of Google GMS alternatives.