LeEco and its failed attempts at world domination

Let’s all pause for a second and think about China. From the 1990s to present day, China has taken the international market by storm. Providing products for all levels of consumers, it seems like nothing will stop this country from taking over the world.

Regardless of the misplaced hate for Chinese products, one can only watch when a massive company tries to penetrate an international market and fails. And the perfect example for this is LeEco.

Everybody knows about Xiaomi, the household Chinese brand. LeEco, formerly LeTV was established six years before Xiaomi, way back in 2004. Although the popularity of Netflix is rising, LeTV was one of the first players in the video streaming market. The owner, Jia Yueting, earned big bucks from this untapped market within China. Buying off Coolpad Group 2015, he implemented technologies from his newly bought company and merged it with his own brand, LeTV. Hence, on 2016, he released the Le 1S & the Le Max.

It was a hit. Not as big of a hit as the OnePlus or the competing Xiaomi mobile phones, but these global hits came right right from the bowels of Shenzhen, where LeTV phones came from;

First mistake: Overestimation of time

Regardless of what the phone offered in build quality and performance, they failed to utilize the time period in which phones featuring Snapdragon processors lacked proper heat dissipation technologies, namely the infamous Snapdragon 810 phones. In this period, Xiaomi rose to the top with their signature flagship phones and they directly skipped implementing this processor in their phones, opting to use the hexacore Snapdragon 808 in their then-flagship phone, the Mi 4S.

LeTV, being a completely new player, took this market by storm but took way too long to do it. Featuring a wonky timeline with no vision, they released affordable flagships at low prices, but with the processor of Mediatek, known for GPS issues and low performance.

Second mistake: aggressive expansion, unknown brand name

For any entrepreneur, starting out in a market is quite easy. You try to sell your product and it slowly builds momentum. But in a saturated market, expansion is quite hard. Just a year after releasing its first phone, LeEco directly expanded into the US market. The US market already had cheap phones pouring in from the likes of Blu and had seen a massive import of Xiaomi phones.

But nobody knew of LeEco.

Up until 2016, LeEco was known as LeTV. LeTV was marketed under a single brand name for its media streaming services and electronics. Their reputed connections with Chinese consumers went a long way and skyrocketed their businesses. But an abrupt decision to change their name tried to push forward a design nobody was ready to acknowledge yet.

Among all these decisions taken within a year, they announced their plans to acquire Vizio in a two billion dollar deal in July 2016. Vizio was to be operated as an independent subsidiary in California, while Vizio’s Inscape was going to be spun out as a privately held company. The deal was later cancelled and LeEco’s reputation in the market was tarnished.

Third mistake: steady cash injection into failed projects

On October 2016, LeEco had a big event in which it announced its plans to expand into the USA. The event was ambitious to say the least, announcing smartphones, 4K TVs, Set Top Boxes, VR Goggles, smart goggles, and a freaking self-driving concept car from another startup company from the owner of LeEco.

Where was the money coming from? The streaming services, of course. But how much can one afford?

A few days later, the company’s CEO sent out an internal memo saying how the company overextended in its global strategy but the company’s capital and resources were limited. Good job Captain Obvious. You bought land from Yahoo in Silicon Valley for 250 million dollars while being strapped on a mountain of debt to suppliers and business partners.

Following of a flurry of mistakes and terrible decisions, LeEco announced that its offices will be home to 12,000 employees in an “EcoPark”. Today, the office is a ghost town with less than 500 people working in the office regularly, as result of serious layoffs and wonky relationships with investors.

Back in China, the CEO tried to secure investments for a while, but were avoided by big investors in the country. A few days ago, the CEO was blacklisted as a debtor in China’s debtor database, being recalled to China for paying debts of a hundred million dollars.

Fourth mistake: management issues

Whereas companies like Xiaomi started out with a strong management and a CEO with proper experience of handling startups properly, LeEco’s initial management started out quite wonky. While Xiaomi’s initial investors consisted of Google’s employees and some from Snapdragon LeEco only managed to poach Google’s lead legal counsel, who stayed on for less than a year.

Overambitious planning without any streamlined operations made LeEco’s resources go down the drain.

On the other hand, Jia Yueting’s very own pet project to take on Tesla – Faraday Future –  saw its California based factory deserted, with no development occurring whatsoever.

Aftermath : making amends

Remember when we mentioned LeEco buying off Coolpad Group in 2015?

A few days ago, LeEco liquidated half of its share on Coolpad. Right after  Coolpad’s liquidation comes 2.2 billion dollars of cash injection into LeEco from Sunac China Holdings. The investment will see 160 million dollars in LeEco’s cinema division, 918 million dollars in LeEco’s ICT sector and 1.2 billion dollars in LeEco’s smart internet TV division.

And the results are already in. A few days ago, LeEco released ten new smart TV models in China. It seems that Jin Yueling finally has a proper vision of expansion through which they can find sustainable development in the markets it has already expanded into.

The future still looks bleak for Jin Yueling as Faraday Future’s California factory is deserted and all outlooks for its ambitious electric vehicle seems scrapped, but we can surely hope that LeEco can regain its former glory and spice up the niche market of Chinese electronics in the future.

The future of electric vehicles

Five years ago, people couldn’t care less about electric vehicles. Why would they? They were unreliable, expensive and slow. Electric vehicles back then were considered a relic of the past. These vehicles running on alternate sources of energy have tried to make a return throughout the course of time, but this time, it might actually be here to stay.

What started the wildfire?

Thanks to a company called Tesla, Inc. electric vehicles are here to scramble the automobile industry. Tesla’s first vehicle, the Roadster couldn’t create a lot of buzz. But things changed in 2012, when Tesla released the Model S P60. At the time of it’s release, it seemed to be the most advanced vehicle within the market, yet affordable to higher-middle class people. Featuring the lowest drag coefficient at the time of it’s release, it shook the world of automotive industry; and it didn’t stop there. NHRA rated it as the fastest accelerating car on a rolling start.

Image: 612to303 / Youtube

Imagine a vehicle that can go from a relaxed family sedan to an absolutely maddening sports car reaching a hundred kilometre per hours; with just a simple OTA firmware upgrade. Called the “Ludicrous Mode”, the vehicle accelerated from 0-60 in 2.8 seconds.

The not-so-awesome side

It all sounds too good to be true, and it is. As convenient Tesla’s vehicles sound, they are plagued with reliability issues. God help you if you have a faulty Tesla, as you’ll spend a significant amount of time with the servicing in order to fix your car properly. Some of Tesla’s vehicles caught on fire as well; in 2016, a vehicle charging in a Tesla Supercharging station situated in Norway caught on fire.

On the Consumer Reports Car Reliability Survey, only recently the Model S’s reliability rating was rated as above average.

On the flip-side

With Tesla’s recent domination, other automakers are trying to get in on the trend as well. A test mule from Porsche was spotted recently, running on an electric power-train. Nissan’s Leaf was an electric vehicle that successfully penetrated the market as well.

World’s biggest automaker Toyota still dominated the market solely because of the pricing and it’s excellent reliability. Availability of parts is a massive factor when the average consumer decides for a car. Years of experience and research has helped Toyota build up a respectable image within the automotive industry, something Tesla is struggling with.

Expanding into bigger things

A smart decision from Tesla was developing a semi truck. A few days ago, Tesla’s co-founder and CEO Elon Musk revealed the Tesla Semi, a truck that looks straight out of a science fiction flick. With this, Musk continues his vow to start an automotive revolution not just in the sedan category. As the truck came onto the stage of the press conference, out of the container loaded with the semi, Musk drove a revamped Tesla Roadster in front of the audience. If you thought the Model S’s Ludicrous Mode achieved astonishing numbers, the Tesla Roadster accelerates to 60 miles per hour in just under two seconds. Mind boggling yet costing the fraction of the hypercars of today, the brand-new Tesla Roadster aims to be launched in 2020.

Image: Reuters

Tesla has laid down it’s cards in the table, and now it’s time to see what the others have to offer. Tesla claims the cost of driving a Tesla Semi will surpass that of a diesel truck within two years of it’s usage, per mile costing 1.53$ whereas a diesel truck costs 1.82$ per mile. To no speculation, Tesla’s main competitor in the semi-truck market is Volvo, and it’s yet to be seen what Volvo retaliates with.

The future of the future

Undoubtedly, the world looks forward to adopting electric vehicles with open arms. With this however, the world aims to kick out gas powered vehicles as well. The entire world now sees a significant portion of electric vehicles occupying it’s market. Electric and hybrid vehicles accounted for 28% of it’s market share in 2016. The country claims to only sell electric and hybrid vehicles by 2030. India has ambitious plans as well, planning to only sell electric and hybrid cars by 2030. Netherlands being a step ahead plans to implement this massive decision by 2025. Countries like UK and France also plan to ban the sale of petrol and diesel vehicles by 2030, and become carbon neutral by 2050.

Naturally, the question occurs; what’s China thinking? Being the largest producer of plug-in electric cars in the world, selling over 40% of all electric cars in 2016, China says it’ll eventually join into the trend without specifying a concrete timeline. Rumors suggest Elon Musk has been negotiating with the Chinese government on plans of establishing a manufacturing plant in China. When confronted with these rumors, Musk suggested that a move might be made in China based on the demand of Tesla’s cars. He suggested the same about establishing plants in Europe.

What about us?

With the rest of the world rapidly changing, it’s obvious that Bangladesh will join in on the revolution soon. Aiming to be ecologically sane, it’s a move Bangladesh must make in order to stand up the world. Bangladesh has it’s own plans to be fully digitized by 2020. With many of the plans moving forward and the economy looking excellent, it seems that Bangladesh has to adopt plans to fully implement electric vehicle into it’s market. Depleting finite natural resources and increasing buying power calls the urgency of electric and hybrid vehicles now more than ever.

Depleting finite natural resources and increasing buying power calls the urgency of electric and hybrid vehicles now more than ever.

A few Model S have already landed in Bangladesh, albeit unregistered and seen as a symbol of luxury. We believe that over time, electric vehicles will become the norm. Clouds of smog hang still within the air of Dhaka, and it’s getting worse. Building an ecologically functional infrastructure is the only way to overcome these man-made hazards, and implementing a structure of hybrid vehicles is a must for the plans of a Digital Bangladesh. We only hope the higher-ups can understand the future of what the entire world and make Bangladesh just as technologically advanced.