LeEco started in the year 2004 as a Content Aggregating and Skilling Company in China, from where on it has grown to also start making televisions, and later, mobile phones, in 2013 and 2015 respectively.
The company actually went public in 2010, when, says Atul Jain, Chief Operating Office at LeEco technology India, “The team decided that this is a right time for us to start investing into start making our own screens, so that the offering of the content or the experience of the content can be better optimised.”
From then on, LeEco has been devising and offering complete comprehensive ecosystems. “We have products which are very high in technology, comparable to the best. We also have an ecosystem which comprises of content and the cloud, and then we have very disruptive pricing because we believe that the era of making money from hardware is over,” Jain added.
LeEco’s flagship Le 1s has an industry price of Rs. 16,000, however the company sells it at Rs. 10,999.
Products LeEco Makes
LeEco wouldn’t stop at mobile phones, not in the least. The company has blueprints ready and will come out with television screens soon, in addition to the screens that are used in mobile phones. Second in line is self-driven electric vehicles, outlining the hard fact that on why energy conservation is must.
“We are also making self driven electric vehicles, which will eventually take some time to come to India but there is a lot of potential in this industry as the world needs to conserve energy. Le Eco’s first self driven and self parking vehicle made its debut at the Beijing Auto Show on April 24th this year,” Jain said.
Scalability and Growth in Indian market
India is one of the fastest growing markets in the emerging markets category or the developing markets. It is one of the few bright stars, where the future and the opportunity of growing is very high. “I think the growth expected is very high this year, close to around 18-19 per cent of the overall industry growth. I believe that the developed markets are not growing as fast as India,” Jain asserted.
India is going to be 4G-enabled by the end of 2017. The consumption of data is already on the high side, which will also increase further. “So, the game would more be around the quality of content and the hardware would become a commodity at a very low margin,” he argued.
“We are planning to open 500 stores in the next one year,” he said adding that franchised stores will be the way forward for the company. The support services, he said, will be an important element of the franchising partnership. “We will offer our franchisees full ‘know how’ of how to do up the stores, so we will give them basic branding which is required. We will give them trainings on our products; give them guidance through our sales team and so on. The sales team will be working hand in hand with them to help increase the business in terms of capturing the neighbourhood markets, in terms of getting consumers to come and try the products. We will do almost everything to make this franchising partnership work and give it all the marketing support it needs,” said Jain citing examples of the way forward.
Why Brick and Mortar?
“I think consumers still like to touch and feel the product. Plus, now we are going to bring out high value television screens, which cannot be bought without really seeing and testing,” he said.
It’s very difficult for anybody to think that high value products that have a large life cycle, such as television screens and other gadgets, whose life cycle is 5-8 years, can be comfortably bought online. The Indian online market is still about 20-25 per cent of the overall market, and having more users to experience the product simply becomes difficult via only-online approach. “So, if you want more users to experience and buy the product, then it is very necessary to have a brick-and-mortar approach,” he explained.
Consistent Return on Investment and Vision for 2016
“We will start with franchise operations in 2-3 months. We are aggressively looking at Tier-1 and Tier-2 for expansion,” he added. “The brand’s return on investment is 30-40 per cent and we want to be the number one brand in the online smart-phone category, and also number one in the smart television category. We want to be a trusted and a loved brand and provide entertainment wherever consumers want it, on whichever screen they want it,” Atul added.
The fact that LeEco launched electric vehicle cars just some months from launching and starting its operations in India is a breakthrough of sorts, more so from a foreign company’s perspective. “We are now expanding to U.S, Singapore, Indonesia, Russia, India in the next 6 months. I think these are very big breakthroughs for a Chinese company to dream and start becoming global as we want to be. I think these are big breakthroughs that are not very easy to achieve despite the language barriers, cultural barriers along with different kind of environmental issues,” Jain revealed.