Honor Launches AI-Powered Tools for Online Shopping Discounts

BEIJING – Imagine a world where your smartphone proactively hunts for the best deals, unlocking savings you might have otherwise missed. That’s the vision Chinese smartphone company Honor is bringing to fruition with its new on-device AI tool. This feature allows users to seamlessly compare prices and promotional offers across major Chinese e-commerce platforms like JD.com and Alibaba’s Taobao, potentially saving consumers significant amounts.

In a demonstration viewed by CNBC, the Honor AI-powered shopping search uncovered coupons that slashed the price of a product by 20%, highlighting the potential for real-world savings. This functionality is set to debut on the newly released Magic8 smartphone and other Honor devices in China, perfectly timed for the upcoming Singles Day shopping extravaganza on November 11th, China’s equivalent of Black Friday.

Honor is aiming high. Fei Fang, president of products at Honor Device, stated in an exclusive interview with CNBC that the company anticipates its AI-driven strategy will propel it into the top three smartphone brands in mainland China by the end of the year. Fang envisions a future where users interact with their phones primarily through an AI portal rather than directly accessing individual apps. This AI would then intelligently provide personalized services based on user behavior and preferences.

“We believe this will happen and we are working along this direction,” Fang said, hinting at further AI advancements in sports, health, and “companionship,” to be unveiled at Honor’s ecosystem conference on October 23rd.

These AI features are integrated into Honor’s MagicOS, the company’s Android-based operating system, through the “Yoyo” chatbot.

While Honor now derives roughly half its revenue from overseas markets, reclaiming the top spot in China requires dethroning rivals like Apple. The competitive landscape is intense. According to Counterpoint Research data for the second quarter of this year, Huawei and Vivo held the leading positions in China with 18% market share each. Oppo and Xiaomi were close behind, each capturing 16% of the market. Apple held 15% followed by Honor with 13%.

Apple is actively working to regain ground in the Chinese market. CEO Tim Cook recently visited Shanghai, coinciding with the availability of the slim iPhone Air in China, after the initial launch of the iPhone 17.

However, while Alibaba Group Chairman Joe Tsai announced earlier this year that the company would collaborate with Apple on AI-powered technologies for the Chinese market, Apple has yet to release its AI features in China. Details on this collaboration remain scarce.

Honor, which became an independent entity after spinning off from Huawei in 2020, forged a strategic partnership with Alibaba in September to jointly develop AI smartphone capabilities. Alibaba’s extensive ecosystem, which includes the Gaode maps app, Fliggy travel booking platform, and the Taobao and Tmall e-commerce sites, provides a rich landscape for AI integration.

Fang stressed that shopping is just one aspect of Honor’s multifaceted AI push. Other features include providing guidance on optimal photo angles, recommending nearby restaurants based on a photo of a location, and enabling taxi hailing via simple voice commands.

For example, a user can say a vague command like “book me a ride back home,” and the AI will leverage on-device data and personalized preferences to automatically determine the home address. Honor emphasizes that personal information remains secure on the smartphone and is not transmitted to the cloud. While the AI can assist with online ordering, manual user approval is still required for all payments.

These AI advancements for Chinese consumers come at a time when ChatGPT is expanding its e-commerce capabilities in the U.S., allowing users to shop on platforms like Etsy and soon, Walmart. Other AI chatbots are also becoming increasingly adept at searching the internet for specific products, setting the stage for a potential shift in consumer shopping behavior.

The true test will be the consistency and utility of these AI-powered experiences. Honor believes its advantage lies in its ability to manage numerous steps, integrating e-commerce memberships and personalized coupons to present users with the cheapest possible options based on a simple request.

According to Honor, its new AI features are powered by a proprietary graphical user interface (GUI) AI model that learns user behavior across Apps, allowing the phone to evolve based on user experience.

The company claims this has already enabled a rapid expansion from 200 tasks in July to over 3,000 this fall, demonstrating the adaptability of its AI model.

In other instances, Honor partners directly with companies like food delivery giant Meituan and video-streaming platform Bilibili, allowing the phone’s AI to interact with these Chinese Apps by using the “Model Context Protocol (MCP).”

Honor integrates some AI functionality from third-party companies such as Kuaishou’s Kling AI video generation model even if those third parties charge per use. According to Fang, Honor is currently offering the features without charge to its consumers, placing some financial pressure on the company.

“This is one of our current challenges,” Fang said. “We have invested quite a lot of money in AI. But we believe we must first create value for consumers before commercialization.”

Honor has committed to investing $10 billion in AI over the next five years. The company will use a sizeable portion of its recent investment to continue developing more AI integrations.

This investment is part of Honor’s strategic shift announced in March to become an AI device company and platform to connect business with consumers. Similar to Apple, Honor also sells smart watches, laptops, and tablets.

Outside of China, Honor works with Google for AI development. Counterpoint reports that Honor is ranked fourth in market share in Europe.

While there are no immediate plans to introduce AI-powered shopping outside of China, Honor showcased at the Mobile World Congress in Barcelona an AI agent capable of making restaurant reservations via OpenTable, hinting at global AI integrations in the future.