Can LeEco Make Good on its Promises?

LeTV rebranded itself as LeEco to reflect its new direction forward. The company held an event yesterday in India where it spoke about its new brand, which involves an open ‘ecosystem’ with a connected world. To do this, LeEco is diversifying itself. The company that started with television and content (hence the original name) has moved on to other venues like smart cycles, internet-linked electric cars, and smartphones.

LeEco’s Ecosystem

Yesterday, LeEco launched three new smartphones in India – Le Max, Le 1s and Le Max Sapphire. The first half of the event, however, was used to talk about the brand’s new ideology. The company’s move towards a comprehensive ecosystem incorporate’s four aspects – Culture, Technology, Internet, and Platform. The idea is to have a broad, connected reach. LeEco has already begun this by launching smart accessories, online content, TV, mobile, and electric vehicle by partnering with Faraday Future.

Flash Sale: Can it Deliver the Goods?

Indeed, LeEco wants to be everywhere. But the question is whether the company can deliver. In India, after launching the smartphones yesterday, the company stated that it will hold its first flash sale on Flipkart on the 2nd of February. There are some reasons why customers in India may feel a little hesitant in going with LeEco’s new offerings.

Firstly, one needs to give props to the company in terms of pricing, especially for the Le 1s which is priced at a very impressive Rs 10,999. The company could have easily priced it a few notches higher given the device’s specs and premium look. Now, the Le 1s looks to give devices like the Lenovo K4 Note a run for its money. But will it?

Lenovo has established a good base in India and is one of the more trusted names. The company also held a flash sale recently on Tuesday and Wednesday for the K4 Note. The company also stated that it sold 10,000 units in less than a second. Registrations, however, shot up to 4 lakh. The uncertainty is how much of its K4 Note units Lenovo managed to deliver. Certainly there must have been a lot of disappointed fans.

LeEco sold over 4 million smartphones last year making it the fastest selling newcomer in the market. It beat the likes of Xiaomi, Meizu and OnePlus on that front. For comparison sake, Xiaomi took a year to sell 400,000 units while Meizu sold 600,000 units.

LeEco’s flash sale will put to test just how well its ‘superphones’ will be received in India. The company’s refusal in providing a figure when asked how many units it plans on selling is not a good sign as it does lead one to question if the company is prepared for the Indian market at all.

No Physical Stores Will be a Hindrance

Moreover, without brick and mortar, it’s hard to imagine how LeEco will sustain in the Indian market. On that note as well the company refused to answer when asked when it plans to open up physical stores in India.

Even today, physical stores remain key to sales of smartphones. Companies cannot rely solely on e-commerce sites like Flipkart and Amazon for sustainment. Granted, LeEco is still early in its entry into a myriad of businesses, but the company does have enough financial backing for brick and mortar.

On a number of occasions at yesterday’s event, LeEco did not shy away from taking jabs at Apple. The company not only compared its Le Max to the iPhone 6s, but also criticised Apple’s closed ecosystem. However, one has to wonder that in naming Apple over and over again, isn’t LeEco establishing the Cupertino giant’s dominance?

When it comes to demand and supply, Apple has delivered on units in surplus. LeEco has a tough job ahead if it wants to entry the top three brand in the country as it claimed yesterday. Given its track record in China, LeEco has done exceedingly well. However, without a proper manufacturing base in India it may see some hiccups. While the company begins to establish itself in the country, it needs to be careful on how much it can deliver initially. A disappointing flash sale will in effect damage the company’s image before it even gets started.

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