Reports have started coming out of the possible exit of LeEco from India. This after a very short stint of a bit more than a year in the huge Indian market that saw it dabbling with well-received smartphone launches in early 2016 and also aesthetically designed budget television models. Now, with the ouster of two key executives and a reduction in staff by upto 85%, the company is surely looking to clear-off inventory and wind up Indian operations. A quick exit after such a short stint in a robust market like India appears unpalatable on most counts.
For one, the company has failed miserably while strategising its India policy. What else could explain it burning away Rs 80 crores in cash month after month and ending up being bankrupt on advertising within a few months of setting up base in India? A key hole in its India policy could also be the fact it failed to gain a toehold in the ecommerce marketplace. When you are spending so much amount of money in advertising, it makes sense to focus only on the ecommerce channel and make it your own within a short span of time. It now appears that the company focused equally on both ecommerce and retail stores and ended up coming out a dumb in both. That it also started selling televisions alongside did not perhaps helps its case as the focus on the core product—smartphones—eventually got diluted.
This is a pity though as LeEco products—smartphones and televisions—both were actually on top of our reviews in CyberMedia Labs and we were definitely fascinated by their looks and performance. Though they did appear fragile but so is the case with other top-selling smartphone models that come from China as well. Demonetisation no doubt hit Indian consumer sentiment and with most FMCG sectors feeling the pinch, we can now safely conclude that it proved to be the final nail in the coffin as far as the LeEco India journey is concerned.