The reason behind this, as stated by the company, is the deteriorating financial health of its parent company after which it reduced the fund supply drastically.
Not only this, the company has slashed its hefty advertising budget as well and have also shrunk the overall team currently handling its operations in India. Further, the company has also cut about 1,000 temporary jobs and will also hold on for any new launches in next couple of months as it hopes to get back to square one, reveals some industry executives. Primarily the said executives blamed the recent demonetization of Rs 500 and Rs 1000 notes for the current crisis.
A senior partner of LeEco India quoted - "LeEco India could have sailed through for some time, but demonetization hit sales badly. While other brands launched promotional offers like finance schemes, there was nothing from LeEco."
LeEco entered the Indian smartphone industry back in January 2016 with its Le1s which quickly went viral because of its value for money proposition. However, the successor to the Le1s i.e Le2 didn't quite escalated the things for the company.
Later on, the Chinese handset manufacturer entered the TV segment in August 2016 by launching three smart LED TVs.
Not only this, in October 2016, the company decided accelerate its expansion plans and made its way to the United States by launching Le Pro3 and Le S3.
Meanwhile, the company also expanded its portfolio by entering into partnership with Aston Martin and Faraday Future to bring out its first driverless car LeSee. As a result of this rapid cash burning, the company is now facing crisis, hence downsizing its operations in all regions of its operations. Whatever be the case, this is surely not a good example for infant smartphone companies as it clearly displays how LeEco blindly went for expansion strategies without any backing up in terms of funds to hold it for the future.
You might like this