“We’re The New Kid On The Block But Among The Strongest” – Atul Jain, COO, LeEco India

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LeEco did what no other company had done in the past – starting local production by setting up a manufacturing plant within 8 months of commencing business in India. It also shows the Chinese company’s intent and seriousness in doing business here. We spoke to Atul Jain, the company’s COO and the man who is in charge of establish LeEco’s connected ecosystem in India.

 

Q. Eight months into operation, how has been the journey for LeEco in India?

Its humbling. We are overwhelmed by the response we received from our customers, fans and superfans, and from the public. You just saw the data. People bought 1 million smartphones in this period is a testimony of our product quality and the value we offer for our customers. In addition to bringing futuristic products to consumers, introducing them to the Le Ecosystem, we also wanted to ensure that all aspects of the business are addressed , such as after sales service , offline POS, customized content for Indian consumers  and now with their manufacturing facility locally built superphones, made in India for India. We are the new kid on the block, but surely, among the strongest.

Q. When did this ‘India manufacturing’ bug bit LeEco?

It all started with the PM’s call for Make In India. Besides, it makes strong business value for any importer. There was a duty differential of around 6 to 8% now because for local manufacturing versus import. This matters a lot for the smartphone industry when the margin is too low because of steep competition. And on a broader level, India is the fastest growing smartphone market, and it makes more sense to have your products manufactured locally compared to source from outside.

Q. How big is the Greater Noida plant ? How will it help end consumers?

The manufacturing facility in Greater Noida is spread across an area of 200,000 sq.ft. with one product line to start with. At present we have a production capacity of 60,000 per month, however, we will ramp it up to 200,000 units per month by end of this year. We will also add one more production line to it. We got Compal Electronics as our global design manufacturing partner.

As LeEco superphones will be made locally we are going to benefit from the Government of India’s “make in India programme. Also with the passage of the GST bill, we can expect a reduction in the costs and benefits for the end consumers.

Q. How much investment you made in to this plant and is Compal partnership is exclusive to you?

We are investing Rs 50 crore in this plant, Rs 35 crore already made and another Rs 15 crore will be made by next year. As far as Compal Electronics is concerned, the partnership is not exclusive. They can manufacture for other brands ass well if they want.

Q. In terms of pricing , how are you planning to deal with the competition ?

Wherever we go, we are known for our disruptive price offering. We are present in the smart phones and smart TV’s categories,both of which are dynamic and key to consumers today. We are offering our consumer the choice of disruptive pricing packaged with top notch quality. Because we believe that devices would be the first touch points for consumer, based on their experience, they would further adopt other products and services of our ecosystem. So our phones or TV’s will continue to adopt a pricing model that will be very competitive and market disruptive.

 With handsets being manufactured locally now, the pricing strategy will be more aggressive and consumers can definitely expect futuristic products at much desired prices from LeEco.

Q. Will you always rely on online retail or will go offline as well? When are you planning to open your own retail stores ?

We have already gone offline with our TVs. For smartphones, we started our online journey to understand the market, and to offer competitive price to customers. You may find us in physical stores by this Diwali.

We have already applied for single brand retail license and have made our submission to the FIPB. We have also asked for a relaxation on the 30% local sourcing norm. To begin with we will open fully owned exclusive retail stores in top 8-10 cities starting with New Delhi, Mumbai and Bengaluru.We plan to display our entire ecosystem products ranging from phones, TV’s VR headsets, Bluetooth devices, power banks and other mobile accessories.

Q. LeEco CEO always talks about a connected ecosystem and connected devices. What are the other products besides smartphones we can expect from LeEco?

You can see some more TVs, and accessories like Bluetooth devices, power banks, headphones in coming days and in this year only. We may bring VR headsets early next year. Home appliances are not in the picture, and autombile is quite far.

Q  What are some of your near-term goals?

LeEco India aims to be among the top 3 smartphones and TV players in India by 2018. We also aim to be the #1 mobile and TV player in online space by end of this year.

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