The logo of Huawei is seen at a store in Shenzhen, Guangdong province, Jan 19, 2017. [Photo/VCG]

Huawei Technologies Co Ltd said it will continue to tap into the internet smartphone market after a report suggested that its sub-brand Honor overtook Xiaomi Corp as the most popular handset brand among China's online population in the first quarter of 2017.

Zhao Ming, president of Honor, the brand created to chiefly target online users, said China's internet smartphone market still has big potential though the growth has slowed down.

"Despite the challenges, the online sales model still has advantage in costs and services. It can help players swiftly respond to consumers' rapidly changing demands," Zhao said.

In the first three months of 2017, Honor sold 10.5 million handsets, beating all other internet smartphone vendors, data from research firm GFK showed. It had a share of 23 percent of China's online smartphone market in January and February.

"In the face of slower online expansion rate, internet players should be wary of blind expansion into the offline retailing channels. The key is to bring real value to consumers and partners," Zhao added.

His comments came amid Xiaomi's pledge to open 1,000 retail stores in China within three years.