Technology 3 min read

Why Chinese Tech Giant LeEco is Buying Silicon Valley

Pincasso /

Pincasso /

Low-cost, and at times low-quality production has been a Chinese tradition dating back to the 19th century. Back then, Western demand for silk had exploded and caught the attention of unscrupulous actors. It is this attitude that led silk buyers to turn to Japan. To this day, products stamped “Made in China” can’t escape the stigma of being low-cost and low-quality.

Unlike South Korean or Japanese electronics manufacturers, Chinese companies tried to break into the US market, but they have not yet met with success. Now, a Chinese tech giant, LeEco, almost unknown not long ago, is trying to succeed where others have failed.

The ambitious group was founded in 2004 under the name of LeTV before switching to LeEco, which is a contraction of Le Ecosystems. “Le” is Chinese for happy.

The LeEco Appetite in the U.S. Market

It’s difficult to compare with Google, Netflix, Apple, or Tesla because it is all these at once. For its launch in the US, LeEco is thinking big. In San Francisco, in front of a massive audience, the Chinese group made it clear it wants to create an empire around communication and entertainment. The company boasts an impressive product portfolio: smartphones, VR helmets, connected TVs, video streaming service, movies, music, cloud service, smart bikes and autonomous electric cars.

It is in the smartphone industry that LeEco is making the most noise. Already active in Russia and India, the company sold 1 million smartphones last year on the Indian subcontinent alone. In China, LeEco is alike a Netflix that builds its own mobile hardware.

LeEco hopes to turn China's reputation with high-quality, low-price products.Click To Tweet

While not the first Chinese company to attempt competing with Apple in the United States, it is certainly the most ambitious. LeEco plans to build a gigantic campus in Santa Clara, in the heart of Silicon Valley, on a real estate purchased from Yahoo for $250 million, which will host more than 1,200 employees.

Everything is High-End, Except the Price tag

LeEco hopes to turn China’s reputation with high-quality, low-price products. Its model resembles that of Apple, where the ultimate goal is to lock in users to its brand and platform.

On the Chinese market, LeEco is already one of the largest manufacturers of smartphones and SmartTVs. Its video streaming service is a success. But the US market is a different beast. Time will tell if LeEco will ever become a household name in the United States.

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