China’s LeEco has refuted Indian press reports that it will leave the India market after firing 85% of its local workforce.
India’s Economic Times reported last week that the Chinese tech company has reduced its headcount in India from more than 350 to around 80. The paper also speculated that LeEco “may finally exit the country after spending millions on promoting its ecosystem of superphones and super TVs”.
While the company has confirmed the reduction in Indian headcount, it issued a statement to deny that it is leaving the country:
“India is one the most strategic markets for LeEco and hence no exit plan. In the past one year, LeEco India has gained market recognition and the initial stage of market seeding has been successful. Now LeEco India has upgraded its strategy from fast market expansion to healthy and sustainable growth, which is the normal renewal of business strategy and execution.”
The company also said it’s gearing up to launch its next model of smart TVs in India, as well as premium models of smartphones, which would both be supported by marketing activities. The statement continues: “The company’s recent moves were well thought out and planned as part of a longer-term strategy for the Indian market, and not triggered by the purported slump in sales due to demonetization.”
In October 2016, LeEco founder Jia Yueting (pictured) made the dramatic admission that the company was facing a cash crunch, as a result of prioritising global expansion, particularly in the US electric vehicles sector, over profitability. However, at the beginning of 2017, the company announced that it had raised $2.2bn in fresh capital from Chinese property giant Sunac and insurance company Huaxia Life.
LeEco started selling its smartphones and other hardware in India in early 2016, at which time it also announced plans for a $7m manufacturing unit outside Delhi. A few months later it rolled out a streaming service, which was packaged with its smartphones and offered content sourced from ErosNow, YuppTV and Hungama Music.
The Shenzhen-listed company also established a production arm in Mumbai last year, with the aim of producing original Indian-language content, although this appears to have now been shuttered.
In 2016, LeEco also started selling its hardware in the US market, acquired US smart TV manufacturer Vizio for $2bn and set up shop in Silicon Valley. It also partnered with Faraday Future in the self-driving vehicles sector – an investment that raised concerns that the Chinese company was expanding too fast.
In early October 2016, LeEco held a splashy consumer launch in San Francisco where it unveiled a streaming service with content sourced from Lionsgate, Mitu, Machinima and Cinedigm. As in India, the company said its strategy is to sell hardware at cost and make profit from its content services.
LeEco, which is an active content producer in China, has also established a Los Angeles production outpost headed by former Paramount Pictures president Adam Goodman.