China’s LeEco launches aggressive push into US market with plan to sell its TV sets and smartphones
Chinese internet company LeEco has made its first major push into the US market with the launch of a slew of hardware products, including its television sets and smartphones, as it looks to conquer a larger consumer market.
The company, which acquired US television maker Vizio for US$2 billion in August, unveiled its brand new 85-inch uMax85 smart TV on Wednesday, which comes with a price tag of US$4,999.
At the event, LeEco also said that it will launch its Super4 X Series of 4K television models in the US, with prices starting from US$649. The TV sets run on Android TV and come in screen sizes of 43-, 55-, and 64-inch screens.
“We want to win the approval of consumers in the US, before moving on to the rest of the world,” said LeEco chief executive Jia Yueting at its launch in San Francisco, California.
The TV sets and smartphones will be available on the company’s e-commerce site LeMall from November 2, in time for the holiday season, according to LeEco.
The company’s smart TV launch represent a part of its ecosystem of products and services, which includes video streaming services, as well as products such as smartphones, a smart bike, and its concept LeSee autonomous electric vehicle.
LeEco also announced that it will partner with companies such as Netflix and Google to provide content for its streaming services. LeEco’s TVs will come bundled with 12 months of free subscription to its content services, including its Le streaming platform, a move that the company hopes will lure US buyers to give its televisions a shot.
The company’s US launch follows that of Chinese hardware maker Xiaomi, which put its 4K Android TV set-top box Mi Box up for sale in the US early this month – its first push into the white goods business in the US.
Chinese hardware makers have been making a push into the US consumer market in a move to target a consumer market with higher spending power as a way of increasing revenue, as products sold in China cannot be offered at too much of a premium since Chinese consumers have less spending power.
“Success [for LeEco] will be critically based on how well LeEco markets the brand locally and how well they are able to introduce LeMall to consumers this holiday season,” said Ryan Reith, programme vice president for IDC’s Mobile Device Tracker.
“The biggest focus [for the company] needs to be acquiring customers from [e-commerce sites like] Amazon, and building momentum in order to gain traction in the US,” he added. “LeEco is focused on making most of its money through [revenue sharing] in content, and in order to do this attaining users is key.”
Wang Yinling, senior analyst for client devices in IDC China, said that entering the US is an important step for LeEco to achieve its ambitions as a truly global brand.
“Before entering the US, LeEco has already entered countries like India and Russia, which are important markets for the company since they represent a larger proportion of the world’s population,” Wang said.
“Apart from having consumers who are more willing to spend, entering the US market as well as India and Russia will also allow LeEco to hire local talent that can help solidify the company’s ambitions of becoming an international brand,” she added.
Wang also said that LeEco’s price points for its television sets are competitive, giving the company a solid chance of breaking into the television market despite being a newcomer in the US.
“Its content partnerships with established companies such as Netflix will also help to make US consumers more receptive towards its products, since US consumers are already familiar and have confidence in such services,” she added.
LeEco’s strategic acquisition of Vizio means that it has access to Vizio’s factories and strong retail channels, allowing LeEco to better distribute and market its televisions in the country, Wang said.
The Beijing-based company has ambitious plans for its US expansion, and in June purchased approximately 49 acres of land in Santa Clara, California from Yahoo to build a US campus.
“This property will be an EcoCity that houses 12,000 employees and offers an open campus where all – including the community – will be welcome,” Jia wrote in a blog post on Monday.
The company already has its headquarters in Silicon Valley. Located in San Jose, California, the LeEco HQ is about 800,000 square feet and houses over 500 employees. The company had said that it had plans to expand that number to 800 by the end of this year.
LeEco first started out as a video-streaming service, and has since expanded into different business units, including the development and production of its electric autonomous car LeSee.
At the launch on Wednesday, LeEco also said that it would sell two affordable smartphones in the US, the Le Pro 3 and Le S3, which will retail for US$399 and US$249 respectively.