LeEco Admits to Facing Organizational and Financial Challenges
Sina Tech, 11/06/16
Jia Yueting, CEO of Leshi Holdings, said that the rapid growth of LeEco, the brand which encompasses Chinese online video content and smart device firm Leshi Internet Information and Technology (300104.SZ) and its affiliates, has led to organizational and financial challenges for the company which will necessitate changes in the company's rate of expansion, but the company overall strategy will remain unchanged.
In a recent interview with Sina Tech, Jia said that LeEco has made three mistakes in the course of its development: overly rapid expansion of its ecosystem of infant businesses; inability to keep pace with the speed of globalization; and failure to avert problems related to workforce expansion.
Jia said that management should take responsibility for these issues and that he will now accept a salary of RMB 1 going forward.
Jia also revealed that through internal and external financing, as well as cost controls, LeEco would manage the problems arising from failure to pay its suppliers. In the future, LeEco's handset business will be completely self-operated, from production to sales, with LeEco using its own online and offline distribution channels to reduce overall costs.
Editor's Note: For more information on this topic, please see "LeEco Denies Rumor of Defaulting on Payment to Suppliers," MD 11/03/16 issue.
Keywords: scandal handset smartphone automobile Internet online video Jia Yueting 300104.SZ Leshi Internet LeEco Leshi Holdings
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