A new tech giant? Why you need to know about China’s LeEco

When outsiders talk about China’s tech scene, there are the obvious giants: Baidu, Alibaba, and Tencent. Then there are the big state-linked firms (the telecoms, Huawei, and ZTE), the internet players (Sina, Qihoo), and the hot mobile startups (Xiaomi, OnePlus). But there’s a Chinese company that often doesn’t get mentioned as one of the big names: LeEco.

Just a couple of years ago, LeEco was called Letv, and it primarily operated a streaming video site. But as its popularity grew, Letv has rebranded into LeEco and branched its business out aggressively in a bunch of directions. The company now makes smartTVs – that’s a no-brainer for an internet video company – but it also makes smart phones. And smart bikes. And a bunch of other smart devices and electronics. It has a cloud computing division. It offers internet finance products. It’s working on a smart electric car. It now has a music division (Le Music), a film division (LeVision Pictures), and a sports division (LeSports).

What was once just an internet video company has branched out into a multi-armed technology and entertainment octopus.

Recently, LeEco has been taking a different tack: splashing cash to acquire a wide variety of companies. In late spring, LeEco spent almost US$500 million buying two Chinese real estate companies so that it could expand into that space. Just two weeks ago, it bought US TV maker Vizio for US$2 billion. This week, it was confirmed that the company has nabbed a bigger chunk of Chinese smartphone maker Coolpad. It was also confirmed recently that LeEco is working on some sort of deal with Netflix.

LeEco’s much-vaunted smart electric car. Photo credit: LeEco’s Weibo.

There are genuine questions about some of LeEco’s funding habits, and whether or not the company can sustain the breakneck pace of expansion it has been keeping up over the past several years. But with a market cap of more than US$13 billion, LeEco is already bigger than some of China’s most storied internet and tech companies.

Of course, it’s difficult to be certain of anything. LeEco is both polarizing and opaque. There are some who think the company is one of China’s most innovative and exciting tech firms. I have also heard nightmare stories about everything from the company’s funding to its corporate culture from people inside China’s internet industry. So are the company’s fans simply drinking the Kool-Aid? Do the company’s critics just have a bad case of sour grapes? Until some of LeEco’s bigger projects – like that smart electric car – actually come down the pipeline, it will be tough to make a conclusive call.

But whatever happens, there’s no denying that LeEco is now a major player in China’s tech scene, with the ability to influence industry sectors ranging from streaming video to smartphones to autonomous vehicles. LeEco certainly hasn’t overtaken any of China’s true giants – it’s not yet on the level of a Tencent or an Alibaba. But increasingly, it can be argued that LeEco deserves a spot at the table, and a place in the conversation.