Xiaomi Inc was caught in a spat with fast-expanding domestic Internet company LeEco on Monday, after the latter claimed on its official Weibo account that Xiaomi's smartphone and TV businesses aren't performing well.
LeEco made the claim in response to Xiaomi CEO Lei Jun's questions about the company's fast expansion. According to a screenshot posted by LeEco on its Weibo account on Monday, Lei disclosed on his WeChat over the weekend that LeEco owed more than 15 billion yuan ($2.2 billion) to several domestic suppliers.
LeEco's Weibo post called Lei's WeChat comment "villainous."
The quarrel should have ended after domestic media discovered that the screenshot of Lei's WeChat comment had been fabricated, but it seems that Xiaomi was still upset by LeEco's earlier post.
"First of all, LeEco should face up squarely to the debts owed to suppliers, instead of trying to divert public attention by playing shabby tricks [on its competitors]," Xiaomi's spokesperson said in a Weibo post on Monday afternoon.
LeEco decline to offer further comment when contacted by the Global Times on Monday.
The Beijing-based company, which built its fortune with the online video streaming service letv.com, made headlines recently for its controversial business model and fast expansion.
Different from most Internet companies, LeEco is adopting a business model that tries to make money by selling Internet content and services instead of hardware devices.
Some analysts questioned the viability of such model as the company is expanding very fast. After making inroads into India and Russia, LeEco made a grand entry into the U.S. consumer sector in late October.
One day ahead of the spat, LeEco's CEO Jia Yueting sent to his employees an internal letter in which he reflected on the overly rapid globalization of the company despite its limited resources and capital.
Shares of LeEco's listed arm on the Shenzhen Stock Exchange dropped for four consecutive trading days, closing down 4.68 percent to 37.85 yuan on Monday.
