LeEco: Playing the Disruptive Business Model

LeEco is a company most readers would be familiar with by now. In the last few years I don't remember seeing a more aggressive smart phone player in the market. They have dominated social media and overall media with their campaigns. Add to that they have managed to get unprecedented numbers.

The Disruptive Pricing Model
I am not getting into the debate whether LeEco's device, Le 1s Eco, is worth it or not or whether MI Note 3 is better or not? We will get into that later. What I do want to mention is what's on LeEco's mind boggling offer.

Consider their offer last week. The consumers who bought a Le 1s Eco, priced at Rs 9,999 also received.

LeEco Earphone worth Rs 1300 - on every purchase
Additional 10 per cent Cash Back on HDFC/Citi Debit and Credit Cards
Additional Rs 2000 - on exchange of the old phone.
Free Back Cover on every purchase
Le Eco Membership worth Rs 4900

What's in this membership?
The users are given access to premium content which is otherwise payable.
Users get access to 2000+ movies (in 10 languages), 100+ live TV channels, which include movies from premium content providers such EROS, Hungama, YupTv. That means movies that are pay on demand on Youtube are free here.

5 TB cloud personal storage space and 3.5 + million songs in 25 languages

Exclusive deals and discounts and live streaming of concerts from all over the world

Coming to the hardware
Le 1s Eco has a Full Metal Uni-body that does look good
3 GB RAM + 32 GB ROM
5.5 inch FHD display
The smartphone also uses USB Type C charger that makes charging at
lightning speed quite literally.
The phone is powered by 1.85GHz Octa-core MediaTek Helio X10 (ARM Cortex-A53, 64-bit) processor. There is also a fingerprint sensor

On the hardware front my personal take is finger print sensor could be better and having a metallic body, there is a bit of heating at the back, which LeEco should do something about. I love it's design and the simple UI.

Is it worth it?
All this is for Rs.9,999. The bundle of offer i.e. smartphone plus content is something that puts them ahead of others. How they are managing it all in this price my guess is as good or bad as yours but going by the figures they seem to have hit the jackpot. The jackpot being having just the right device at just the right time.

The Changing Market
According to them LeEco's first 100 days in India have really been an a superhit. They successfully sold an astounding number of 500,000 smartphones alongwith 500 plus million worth content through LeEco memberships. Now there is no way to verify that data. It's data provided by LeEco. But let's assume for a minute this data is correct. It speaks a lot on the change in Indian market and where it's headed.

With increasing bandwidth and the 3g and 4g revolution, Indian is going through a major revolution both in terms of technology and content. Consider the amount of content available at the touch of a button is far more than our ancestors probably utilized in lifetimes. With increasing bandwidths and availability of content cloud, the demand for on-demand content is on the rise. Add to that the first screen of most Indians is the smartphone.

The Last Word
Will the LeEco system work? That's a question I doubt anyone can answer however they do get the credit for creating or at least attempting to create a functioning eco-system, an alternate to iPhone ecosystem, where the content provider becomes a partner to the smartphone.

In terms of bundled offer nobody not even Xiaomi's MI Note 3 comes close, even though in terms of smartphone hardware per se they are comparable. However with Reliance Jio getting on the tracks, LeEco will have competition. In the disruptive model Reliance has deeper pockets, the Chairman's personal interest as well Relaince Jio comes with a lot of ammunition which includes Viacom, Network 18, Nickelodeon, MTV just to name a few (Reliance Jio owns all this and more).

The consumer ultimately wins, it going to be raining offers soon. There is an old proverb when two are fighting, the third wins. What disruptive pricing does to the industry in the long term is something that research will tell. For now the consumer gets to enjoy disruptive pricing offers as best as it gets.