Chinese smartphone and high-end television manufacturer leEco is planning to expand its manufacturing base in India after tasting success just nine months after launch. The company, formerly known as leTV and founded by Chinese entrepreneur Jia Yueting claims to have sold over a million leEco smartphones in the few months after launch. Speaking to The Pioneer, Atul Jain, Chief Operating Officer, leEco Technology India explained that this was due to the rapid commoditization of hardware.
“Manufacturers have to realise that there are no margins in the hardware business and consumers will gravitate to the manufacturer providing the best value”, Jain pointed out. To keep costs lower than the competition, leEco has bought into the ‘make in India’ story and currently has a capacity of 60,000 units per month at their assembly facility in Greater Noida. “We are ramping our production rate up to 200,000 by the end of the year and to 400,000 units by march-April 2017.”
The Indian smartphone market is currently running at around 10 million units per month with sales climbing by 15-20 per cent annually. However, Jain feels that the data price war started by Reliance Jio can also be beneficial for smartphone manufacturers. “Users will want to take advantage of higher speed data services over 4G. For that they will need faster phones with more memory, better cameras and more responsive screens, which is what we are offering at a competitive price.”
Yet, with commoditization how would leEco make any moneyIJ Jain said that is an area where leEco has ‘changed the game’ in its home market of China by “building an ecosystem of services.”
In China, leEco offers subscription services that bundle online storage and videos from a host of providers through a monthly subscription. “Getting a consumer to pay a monthly or annual subscription is the only way to make money now”, Jain said adding that many Indian manufacturers have seen sales plummet because they have not been able to adjust to new reality.
leEco also recently launched their new series of smart televisions in the Indian market and despite the small market size for large (55-inch plus) 4K resolution televisions were surprised at the response.
“We sold our entire stock of 5000 televisions very quickly. This surprised us because the market for such televisions is only 10,000-odd units a month. But people get convinced by an attractive proposition.”
However, Jain said that unlike their Chinese rival Xiaomi which recently launched an air-purifier, leEco was not getting into any other market segments. That said, Yueting has a huge interest in urban mobility and is developing an electric vehicle to challenge Tesla which should be on Chinese and American roads by late-2017 or early-2018 and maybe even in India soon.