BackLeEco aims to replicate China model in India’s smartphone market
LeEco is nursing ambitions of becoming India's third largest smartphone vendor by the end of 2016
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New Delhi: Chinese technology company LeEco (Le Holdings Co. Ltd), which entered India this month, plans to replicate its China model in the country by setting up an ecosystem consisting of devices, content, cloud and a user interface platform, as it seeks to make India its largest market after China.
The company is nursing ambitions of becoming India’s third largest smartphone vendor by the end of this year.
As it gears up to roll out more smartphone devices and accessories such as virtual reality headsets, smart TVs and smart bikes next quarter, it is internally discussing plans to set up manufacturing facilities in the country.
With the launch of two smartphones in early February, LeEco has joined the growing number of Chinese smartphone brands in India such as Xiaomi, Meizu, OnePlus, Gionee, Oppo, Zopo, QiKU and Coolpad, which are seeking to repeat the success of companies like Huawei Technology Co. and Lenovo Group Ltd in the country.
India is the fastest growing smartphone market in the world and is set to become the second largest by 2017 by overtaking the US but behind China, according to research firm International Data Corporation.
“In China, we have a very successful ecosystem which is still evolving. It comprises of devices, content, cloud and platform, which we are bringing into India," said Atul Jain, head of the smartphone business for LeEco India, who served as the senior vice-president and head of global emerging market for digital appliances at Korea’s Samsung Electronics Co. “What we want is to replicate our China model in India."
LeEco, which is also present in the US and Hong Kong, operates in multiple segments, including content, video-streaming, mobile, smart TVs, sports, automobile and cloud among others.
The company, which forged partnerships with Eros Now for Video-on-demand (VOD) and with Yupp TV for TV content streaming in India last month, is now looking to scale up a cloud data network the country to enable Indian users to get access to video content from its partners.
“In China, through our partners, we have 100,000 hours of content available for our users. In India, we are looking to do the same from the second quarter," said Jain. “Globally, we have about 650 cloud centres, where the company hosts data on cloud through third party services. We are looking to establish multiple such centres, which we call cloud data networks (CDN), in India."
The company, which has big plans for second quarter of the year, it is quietly building its network. It is setting up offices in Delhi, Mumbai and Bengaluru as it looks to expand its team to 200 people from 60 people at present.
LeEco has already opened a research and development centre in Bengaluru which will have about 1.000 people by the end of this year, who will work on building software capability specific to Indian users initially and then develop those features for global market.
LeEco will also set up an offline distribution network in addition to launching its own stores through a franchisee model, said Jain. Initially, the company sees growth coming from metros and tier 1 cities. In the second phase of company’s network expansion, it will target tier II and tier III markets, he said.
LeEco, formerly known as LeTV Holdings or Leshi Internet Information and Technology, was started by Jia Yueting in 2004.
LeEco started its mobile business in 2015 by introducing four smartphone models including Le 1, Le 1 Pro, Le Max and Le 1s. In India, the company claims to have sold 70,000 devices between the two models it launched, Le Max and Le 1s, during the flash sales on e-commerce platform Flipkart last week.
While the company remains bullish on the India market, industry experts remain cautious.
“The company has a top down approach where it is trying to be unique in its offerings. The ecosystem that it is setting up is okay, but it needs to have products at different price points if it aims to become one of the top 3 smartphone companies in India," said Vishal Tripathi, a senior analyst at technology research firm Gartner Inc. “The company needs to first create its own brand in order to compete against brands like Micromax, Samsung and Huawei."
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