LeEco buys Coolpad to boost subscription, smartphone sales

Jia Yueting, CEO of LeEco Holdings Ltd, presents LePhone 2,the second generation smartphone manufacturered by the company during a product launch event held on April 20, 2016 in Beijing. [Photo provided to chinadaily.com.cn]

Some industry analysts noted that the online marketing and online distribution business model that initiated by domestic smartphone maker Xiaomi and followed by many vendors including LeEco, has met a slowdown period as the first smartphone upgrade tide has ebbed.

"Online sales currently accounted 30 percent of the total 450 million units sales volume in the country. The core competitiveness for the nation's top ten players that rely heavily on online distributions to boost their sales will be their brands' reasonable performance," Yan added.

Coolpad's products will be introduced on LeEco's online distribution channels and LeEco's video content-powered "eco-system" business model will also be ingrained in Coolpad's gene, producing more video accessibility to its future hardware and software.

In addition to more than 500 direct offline stores in China, Coolpad will also boost the new alliance's market expansion in North America, Europe, Asia and Africa.

"We hope the combined sales of both brands will reach more than 100 million units in 2017," Jia, head of both LeEco and Coolpad, said on his Sina Weibo account.

Being a traditional handset maker, Coolpad, which used to collaborate with telecom carriers to promote its new phones, has currently faced fierce competitions from the other domestic new comers in both online and offline sales perspectives, and the company has been keen to seek new partners to break through its predicament.

Last year, the company launched Coolpad Note 3 in India through local e-commerce distribution channels.