Last year, Chinese e-commerce company Xiaomi captured mindspace, as well as the market in India, with a bunch of value-for-money smartphones. This year, it seems another Chinese company, LeEco — earlier popular as Le TV — is set to do the honours, but at a much larger scale. Buoyed by the first two flash sales of its Rs 10,999 smartphone the Le 1s, Atul Jain, COO of Smart Electronics Business, LeEco India, says his company has much more to offer than smartphones. Excerpts from an interview with Nandagopal Rajan:
Q. What are LeEco’s plans in India?
We are an Internet company from China, and we are going very aggressive in India, the US and some other markets. Basically, we are an ecosystem company with a four pronged approach: devices, content, cloud and platform. We believe the integration of these four will enable us to provide for the entertainment needs of all our customers in India.
Our first devices have been launched, kicking off the ecosystem. We had a first flash sale, which was a record with 70,000 units being sold from 605,000 registrations. In terms of content, in China we have over 1,00,000 hours of programming and we are building a similar platform in India and have announced partnerships with Eros International and Yupp TV. We are talking to other partners too and more announcements will come soon. The third part of our ecosystem is unique and we have 650 cloud centres around the world offering a seamless experience to the user. No one else has this kind of reach. The last is our platform based on LeEco UI with Le View which brings in the content and Le Lite which is intelligent enough to understand which content you are consuming and push more of that.
Q: Is this going to be your big differentiator?
The devices are just the first part of our ecosystem. There are many device companies, but the devices are moving to a zero-profit zone. We are also selling in those ranges and our bill of costs is public. Any player who is limited to devices will eventually find the going tough.
Q: With limited margins you will have to be a big volume player? Are there any targets?
Volume is important. I don’t have a number I can give you for India. In China, we launched last year and sold 4 million smartphones and 3 million televisions. We are the number 1 online brand in China. In India, we want to be among the top-three smartphone brands in the next one year. I think this is a pretty aggressive target. But going by how things are changing in the tech world, I am not really worried about whether we will be able to achieve this or not.
Q: Since Xiaomi came in last year, are Indian companies struggling to find the kind of pricing Chinese players can offer?
I don’t want to say Chinese players, but yes, the era of making only devices is gone. If you think you are a pure devices player in a certain segment, the hyper competition will mean you are soon struggling to make any money. It is an unviable option and the only way to go is to offer what the consumer wants on his device. Which is the ecosystem we are offering. We are even working with companies like Aston Martin to integrate even vehicles into this ecosystem.
Q: Is there any roadmap on when you want to be in a China-like position here with your ecosystem?
I think by end of 2016 we should be there. I would expect to be in the top three by then. Also, we should be number 1 in the online business within six months, but for now we will stick to Flipkart as our exclusive online partner. Our long term goal is to have an offline presence through our own stores and partners.
Q: The Le 1s is generating a lot of interest in India. Do you think this device will make you a household name in India?
We have offered both the Le 1s and Le Max. The volumes will come from the Le 1s which has a sweet price of around Rs 11,000. The Le 1s will be a big driver for us, but it will not be the only one as we will have other devices coming in soon.
Q: You changed your branding from Le TV to LeEco, but the phones being sold here still have the old branding. When will that change?
It is good that this question came up. We made the change in January to incorporate our new corporate vision. In India, the lead time is almost 12-16 weeks so these phones were obviously made before the brand change was made.