In a spree to give the new age tech mantra to the Indian consumer, LeEco has opted for brick and mortar to reach out to the consumer. In a brief interview Atul Jain, COO, LeEco shares about the future of the brand in India.
Please share the till date journey of LeEco and What according to you have been the U.S.P of your brand?
We started in the year 2004 as a content aggregating and Skilling Company in china and from there on we have also grown to start making mobile phones in 2015 and earlier to those televisions in 2013.
We actually went public in 2010 and we decided that this is the right time for us to start investing into making our own screens, so that the offering of the content or the experience of the content can be optimized in a better manner.
We offer a complete comprehensive ecosystem; we have products which are very high in tech comparable to the best. We also have ecosystem which comprises of content and the cloud, and then we have very disruptive pricing because we believe that the era of making money from hardware is over. So, for ex. the industry price of Le 1s is Rs. 16,000, however we sell it at 10,999.
How do you evaluate the Indian market in terms of scalability and growth? What business strategy are you adopting for the transforming Indian consumer?
India is one of the fastest growing markets in the emerging markets category or the developing markets. It’s probably one of the few bright stars, certainly this year. I think the growth expected is very high, around close to 18-19% and overall industry growth is expected. I believe that the developed markets are not growing that fast, so the future and the opportunity of growing in India is very high. However one has to deceive that what is the future going to be. India is going to be 4G enabled by the end of 2017, the consumption of data is already on the high side, which will also increase further. So, the game would more be around the quality of content and the hardware would become a commodity at a very low margin.
What are your criteria for selecting franchisees?
Essentially, the partner should be very keen and motivated to work for himself and the priority is that he should own the place. He should be keen to be in the Hi tech, Cutting edge industry and hence have some kind of interest in technology himself. He should have a view to kind of change the entertainment industry, the way it’s seen now.
We need about 500-1000 sq ft stores which are in prime locations or good locations that are easily accessible and if a partner has some kind of capability to place the store as per our request as well as keep some products as per our guidance then it will suit us the best.
Elaborate about the training and support that you will offer to your franchisees?
We will offer them full ‘know how’ of how to do up the stores and we will give them basic branding which is required. We will give them some training on our products, adding to full guidancethrough our sales team which will be working hand in hand with them to help increase the business in terms of capturing the neighbourhood markets, in terms of getting consumers to come and touch and feel the product, almost everything to make this franchising partnership work comprising with marketing support.
Apart from basic amenities, what else do you offer to lure the franchisees?
So, we offer a Le Eco membership, which is a membership for our content services. We are definitely looking at giving these opportunities to our franchisees to offer the services to the Le Eco customers and Non Le Eco customers as well(all the customers). This membership works on a reoccurring revenue basis, which means the user either pays monthly revenue or a monthly fee or an annual fee. So, for ex. if he agrees to pay a monthly fee of Rs. 490 P.M, then he will pay this amount and till the time its in force the franchisee will earn a percentage of that amount every month. It works very similar as an insurance policy, which means we are giving him an opportunity to really scale up his business and it can actually revive the process to reach out to the old customers.
Do you think the Indian consumer has evolved in terms of opting Chinese Smartphone makers?
I would rather say that both of the things have happened parallel and the Indian consumer has experienced the product, which he has found of very good quality and has appreciated the product and hence he has changed the ideology behind the Chinese products coming into the Indian market.
There was a little bit of scepticism, or certain point of negativity feeling that the products were not of good quality but the Chinese products have proven themselves and earned the acceptance by the Indian market. Hence, it is a parallel equation.
What according to you has been the biggest breakthrough of LeEco?
The fact that we have launched electric vehicle cars just 2 weeks back with starting its operations not a long time ago itself is a very big breakthrough for us comprising with launch of our Mobile phones category in 2015 and we are now expanding to U.S, Singapore, Indonesia, Russia, India in the next 6 months. I think these are very big breakthroughs for a Chinese company to dream and start becoming global as we want to be. I think these are the big breakthroughs that are not very easy to achieve despite the language barriers, cultural barriers along with different kind of environmental issues.
What are your expansion plans? How many franchise stores you planning by this fiscal?
We will also come out with television screens in future and in addition the screens that are used in mobile phones. We are also making self driven electric vehicles, which will eventually take some time to come to India but there is a lot of potential in this industry as the world needs to conserve energy. Le Eco’s first self driven and self parking vehicle made its debut at the Beijing Auto Show on April 24th.
We want to be the no. 1 brand in the online smartphones category and also no.1 in the smart television category. We want to be a trusted and a loved brand and provide entertain wherever consumers want it, on whichever screen they want it. We are targeting the Tier II and the Tier III markets and are planning to open 500 stores in the next one year.