As you know, LeEco can be said to have ceased to exist. The company got into debt, with which it still has not paid off. On June 4, a Shanghai court froze the bank accounts of its creator and CEO Yuetin, as well as people close to him. That is what happened with the company is almost equivalent to a complete bankruptcy.
Originally opened in 2004, the company focused on the production and sale of video content. LeEco has become China’s largest telecommunications company. Many called the company "Chinese Netflix"
. The catalog of their services consisted of hundreds of thousands of serials and about ten thousand movies, the monthly audience of the company in the best of times was about 800 million people.
Until 2016, the company was only a content provider, but the company soon reached a number of agreements with Foxconn and took a rather logical step for a media provider, began producing its own TVs
, called Super TV.
They were equipped with sturdy screens, based on Android, and possessed a full range of services of the company itself. Naturally, the sales of televisions in China were quite good, because the video services with which the televisions were equipped were oriented to the Chinese market.
After that, the company did not release too much time for new devices. He decided to create his own ecosystem consisting not only of smartphones and televisions, but even of electric bicycles and electric vehicles. The company's first smartphone was LeTV One (as well as One Pro and Max). The devices turned out to be quite good for the first smartphone of the brand, but they were mainly spread again in the Chinese market.
Big profits turned heads to the company. It seemed to him that with such a huge capital the company was able to compete with market leaders. The company made loud statements in the direction of Apple, and even wanted to compete with the Alibaba Group (owner of Aliexpress).
The head of the company, Yuetin, was nicknamed "the Chinese Ilon Mask"
for presenting his own electric car, which never entered the market.
Beginning of the End
Killing for the company was entering the American market. The company spent $ 250 million to buy the premises, and also decided to immediately hire 12,000 employees.
Some people even then realized that the company simply does not have enough money for such a global expansion. A month later, the company admitted that it did not calculate its strength:
She did not find the approach to the American market that really worked in a market that was in many ways different from the Chinese market. The Chinese managers of the American branch of LeEco could not find a common language with the American employees, and did not listen to their opinion.
As a result, the company instead of the planned $ 100 million earned only $ 15 million. It became clear that the company needed new cash investments, and at that step she made a mistake, which was her last. She took 1.4 billion dollars and put them all in advertising, then took another 2.2 billion dollars. But all these steps were not justified because LeEco smartphones were still selling poorly.
Separately, I want to say about the company's entry into the Russian market. She launched a large-scale advertising campaign, was to open a flagship store in Moscow (which recently closed).
And I confess, I myself fell for the advertising stick of the company: I bought a LeEco Le 2 smartphone at the start of sales, and at first it pleased me, the firmware worked quite stably, even an update for the system came out. But later the updates stopped coming out, I switched to custom. But the real problems started later — stripes began to appear on the screen and it began to burn out, but the main thing was nowhere to fix the smartphone, because the company’s website did not work and it was also impossible to contact customer support.
As a result, it can be said that the company would have ruined itself, if it were not for its gigantic ambitions, the company would still exist in its normal form, and would receive greater profits.