March 3, 2017 10:52:39 am
LeEco’s top executives Atul Jain, who was the chief operating officer, and Debashish Ghosh, who was the chief operating officer for content, have both resigned from the firm.However, when contacted by indiaexpress.com, a LeEco spokesperson denied any plans of giving up on the Indian market. An Economic Times report had confirmed the departure of the two executives, but the report also added that LeEco has fired 85 per cent of their staff and plans to quit India soon.
The LeEco spokesperson did not confirm if the company had indeed fired 85 per cent of its staff. On the ET report, the spokesperson said it was not going to quit the Indian market and there was nothing unusual about two executives leaving the firm to pursue other opportunities.
However, reports for firings at LeEco India have been doing the rounds for some time now. Former LeEco employees confirmed to Indianexpress.com that a host of firings have taken place at the firm, though they didn’t give an exact number.
An earlier Bloomberg report said the Chinese firm’s chairman Jia Yueting had written a letter to shareholders, investors admitting there was trouble in the company.
In India, LeEco had tried to focus its smartphones around content and had tied up with Eros International. The tie-up has also ended now, and the strategy around bundling content with smartphones and big television screens didn’t really pay for the company. Unlike China, where content remains restricted, India has open access to platforms like YouTube, Facebook, Netflix, Amazon Prime Video, etc which makes it harder for one player to dominate content.
Its mid-range offering was the LeEco Le 1 and LeEco Le 2, which sported premium specifications for their pricing, but failed to boost the company’s fortunes in India. Unlike players like Xiaomi, Oppo and Vivo, which have made significant gains in India, LeEco didn’t quite grab the same market share in India.
According to the ET report, LeEco also had a higher marketing budget than most of the earlier rivals. When it first launched in India, LeEco went on a marketing blitzkrieg, and had grand launch events for its phones, followed by a significant push on digital and offline advertising. It also went on hiring spree in India to promote sales of its phones.
Last November, Le’sEco Jia wrote a letter admitting financial trouble. LeEco is the umbrella company for businesses which includes sports media, automobiles, smartphones and TVs. LeEco is known as the Netflix of China, and bundles content into its phones in China. However, that strategy hasn’t quite worked out in India or China it seems if one goes by earlier reports.
“No company has had such an experience, a simultaneous time in ice and fire,” Jia wrote in the letter, “We blindly sped ahead, and our cash demand ballooned. We got over-extended in our global strategy. At the same time, our capital and resources were in fact limited.”
The company also entered the US market recently, but clearly it was not all rosy for the firm. Now it looks like the India venture is facing an uncertain future, as both its leading executives have resigned.
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