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Chinese OEMs LeEco and Xiaomi have reduced their component orders due to a decline in sales following a price increase. Xiaomi’s online sales in China declined by 10 percent after it raised prices of its Redmi 4 series of handsets by CNY 100 ($US15).
LeEco has also raised prices of its LePro 3 smartphones by CNY 200. Both companies have been forced to hike prices of their smartphones due to an increase in component cost and a decline in sales. As per a Digitimes report, Xiaomi and LeEco’s sales in China declined by 42.4 percent and 39.5 percent in Q4, 2016.
Xiaomi has been struggling in China due to its strategy to only sell its smartphones online. This has allowed other local OEMs like Huawei, Oppo, and Vivo to rapidly expand their market share by greatly expanding their offline presence. Xiaomi has realised its mistake and is now changing its strategy to open physical stores in the country.
As for LeEco, the company is already going through some troubled times as it is facing a financial crunch. The company’s CEO accepted that the company expanded into multiple segments too fast and has ended up burning too much cash very quickly. A recent report also suggested that LeEco was planning on exiting the smartphone market in India and has already fired more than 85 percent of its staff.
[Via DigiTimes]
