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Hyper-active Chinese smartphone and smart television maker LeEco is likely to crimp India plans after its parent, reeling under a severe financial trouble, squeezed the fund supply to the India unit.
This means the company’s plans for single brand retail through its own stores and set up 500 brand stores in India through the franchisee route is also likely to move into cold storage.
LeEco India is exiting offline sales of smartphones, cut 1,000 in-shop temporary jobs, slashed advertising budget and will slow down launch of new models for next couple of months till the situation eases, three senior industry executives said, asking not to be named. The company may also shear its India team, they added.
Industry executives said the demonetisation of old Rs 500 and Rs 1,000 notes last month hit the firm’s operations when the market itself took a beating, accelerating the crisis.
“LeEco India could have sailed through for some more time, but demonetisation hit sales badly. While other brands launched promotional offers like finance schemes, there was nothing from LeEco,” a senior trade partner of LeEco India said.
The company’s senior management team has informed trade partners that it will go slow for next few months and focus only on online sales. It will sell through Flipkart, Amazon, Snapdeal and its own e-store in the country.
An email sent to LeEco India did not elicit any responses till Tuesday press time. Bengaluru-based cellphone retailer Sangeetha Mobiles, which runs 305 stores and had entered into a direct deal with Le-Eco for offline sales, said there has been no supply of handsets for last couple of months.
“It seems LeEco will only sell online since the cost of operation in online is much lower than offline,” said Sangeeta Mobiles’ managing director Subhash Chandra.
Last month, LeEco’s founder and chief executive Jia Yueting had written an email to employees saying the firm had burnt cash too quickly as it expanded into businesses ranging from smartphones to driverless cars.
Apart from China, the company had major plans in the US and India while it was progressively expanding into other territories. The founder admitted its global expansion strategy went too far in the face of limited capital and resources and now LeEco will cut costs and realise efficient operations.
LeEco, which entered India in February under a partnership with Flipkart, immediately caught consumer’s attention with advertising blitz spending Rs 70-80 crore every month and attractive pricing for both smartphones and large-screen LED television sets.
The company’s management said it does not make any profit on handset or television sets thereby they are able to sell at such low prices. Instead, LeEco has plans to earn profit from selling membership to access exclusive content from its products and is building a content library which too is now slowing down, industry executives said.
leeco exits offline sales, cuts jobs, slows down new launches, slashes advertisement spends, Telecom News, ET Telecom
This means the company’s plans for single brand retail through its own stores and set up 500 brand stores in India through the franchisee route is also likely to move into cold storage.
LeEco India is exiting offline sales of smartphones, cut 1,000 in-shop temporary jobs, slashed advertising budget and will slow down launch of new models for next couple of months till the situation eases, three senior industry executives said, asking not to be named. The company may also shear its India team, they added.
Industry executives said the demonetisation of old Rs 500 and Rs 1,000 notes last month hit the firm’s operations when the market itself took a beating, accelerating the crisis.
“LeEco India could have sailed through for some more time, but demonetisation hit sales badly. While other brands launched promotional offers like finance schemes, there was nothing from LeEco,” a senior trade partner of LeEco India said.
The company’s senior management team has informed trade partners that it will go slow for next few months and focus only on online sales. It will sell through Flipkart, Amazon, Snapdeal and its own e-store in the country.
An email sent to LeEco India did not elicit any responses till Tuesday press time. Bengaluru-based cellphone retailer Sangeetha Mobiles, which runs 305 stores and had entered into a direct deal with Le-Eco for offline sales, said there has been no supply of handsets for last couple of months.
“It seems LeEco will only sell online since the cost of operation in online is much lower than offline,” said Sangeeta Mobiles’ managing director Subhash Chandra.
Last month, LeEco’s founder and chief executive Jia Yueting had written an email to employees saying the firm had burnt cash too quickly as it expanded into businesses ranging from smartphones to driverless cars.
Apart from China, the company had major plans in the US and India while it was progressively expanding into other territories. The founder admitted its global expansion strategy went too far in the face of limited capital and resources and now LeEco will cut costs and realise efficient operations.
LeEco, which entered India in February under a partnership with Flipkart, immediately caught consumer’s attention with advertising blitz spending Rs 70-80 crore every month and attractive pricing for both smartphones and large-screen LED television sets.
The company’s management said it does not make any profit on handset or television sets thereby they are able to sell at such low prices. Instead, LeEco has plans to earn profit from selling membership to access exclusive content from its products and is building a content library which too is now slowing down, industry executives said.
leeco exits offline sales, cuts jobs, slows down new launches, slashes advertisement spends, Telecom News, ET Telecom
