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How does the LED industry “pain point†ridden lighting companies break?
At present, the lack of resources and energy shortages in the world have become the bottleneck restricting economic development. All major LED lighting companies are striving to enter the capital market, which has led to the peak of the listing of LED lighting companies in the past two years. The past year has been a year of revolution and a revolution for the LED lighting industry. Changes in the industry environment have pushed many companies to the forefront of transformation. At the same time, in the face of increasingly competitive and stimulating lighting environment, major enterprises have encountered varying degrees of impact, industry overcapacity, core technology shortages, mergers and acquisitions, closures, price wars and so on. At present, the lack of resources and energy shortages in the world have become the bottleneck restricting economic development. All major LED lighting companies are striving to enter the capital market, which has led to the peak of the listing of LED lighting companies in the past two years. In today's highly developed market economy, borrowing financial leverage is the preferred means for companies to integrate capital advantages and become bigger and stronger. However, debt management is actually a double-edged sword, and news of big companies’ losses has also emerged endlessly. The industry's overall strength is weak, and the ability to resist risks is poor. The domestic LED lighting industry has great potential and weak strength is the consensus of the industry. The quality of export products has become crippled, and the domestic sales quality is not up to the situation of imported goods. The domestic LED lighting industry is deeper. Bad impression of poor quality. For a long time, the core technology of LED upstream epitaxial wafers and chip market has been monopolized by several foreign industry giants. China's LED lighting industry is weak in two key areas of epitaxial wafers and chips, which makes it difficult to reduce the cost of LED lighting, which greatly weakens competitiveness. At present, although the domestic lighting market has large capacity and many brands, it has always presented a situation in which foreign brands are unique. On the one hand, several foreign brands represented by Philips, Osram, GE, etc. are rampant; on the other hand, although there are a large number of local lighting companies, they lack brand influence and core technology advantages, and some of them are also for OEM of foreign products. Even a smaller version. There are problems with the channel strategy, and the sales road is blocked. At present, the sales methods of domestic LED lighting manufacturers are mostly sales. That is, the company does not establish the initiative to explore the international market, and does not take the initiative to establish sales channels, but takes a very Passive way, wait for foreign customers to place orders. The reason why enterprises choose to sell is because they establish a sales network at home and abroad to a certain extent. They must not only recruit professionals to increase sales costs, but also invest in management funds. The process is very complicated and difficult. The cost of the pin is small and the operation is simple, but its drawbacks are also obvious: the competition of exporters adopting the sales method is becoming increasingly fierce, and the sales of this model are very unstable, and the enterprise is in a very passive position. In addition, China's manufacturing technology capabilities and innovation capabilities are relatively weak, OEM model is common in China's manufacturing industry, China's LED lighting manufacturers to adopt OEM mode to export lighting fixtures, with the aim of reducing business risks, saving market, technology research and development, The cost of advertising. However, this model also has a big drawback. That is, enterprises are over-reliant on OEMs and do not explore foreign markets on their own. When foreign customers stop OEM orders, enterprises will lose sales channels, and they will be separated from the market because they cannot grasp the sales channels. The situation has caused the entire enterprise to collapse or even close down. The price war disrupts the order and the service system is not perfect. It is undeniable that it is not a bad thing to fight the market at a price. The low price strategy is a market tool. Philips has launched an ultra-low price of $5 for two LED bulbs in the North American market, not to mention whether Philips and its supply chain manufacturers are profitable, but this kind of price reduction is not something that the average manufacturer can compete with. However, when the price reduction of lighting products has become the norm in the industry, there will be a situation in which many brands have joined the price war. We must know that in the price war, some companies compete for the market and seek sales, at the expense of product and service quality. They will use the worst components to produce low-priced, low-quality products that enter the market. Will accelerate the deterioration of LED homogenization competition. In February 2016, the Guangdong Provincial Bureau of Quality and Technical Supervision announced the quality of 13 product quality supervision and inspections of household refrigeration appliances in 2015. Among them, 194 batches of lamps and lighting fixtures were spot-checked, and the unqualified product discovery rate was 18.6%. In 2016, the price war in the domestic LED industry is getting hotter and hotter. If the LED industry is to develop healthily, it is necessary to make corresponding adjustments. Lack of innovation, low value-added products China is currently in the special stage of industrial restructuring and upgrading, relying on technological innovation to promote the development of strategic emerging industries is the industry consensus. In the past two years, with the joint promotion of policies, technology and market, the lighting industry has achieved rapid growth, showing the characteristics of growing industrial scale, obvious advantages of industrial clusters, and remarkable results in promotion and application. However, due to the failure of key technologies in China, the lack of system technology, and the weak technological innovation capability of enterprises, the industry is still at the low end of the industry chain, and the added value of products is not high, resulting in overall capacity. Excess, small and micro enterprises survived. In the LED industry chain, China leads the world in the middle of the package, while the upstream core technology and equipment are mostly mastered by foreign companies, which makes the price of LED lamps still far from the price of ordinary lamps. The ability of technological innovation is not strong, and it has become a bottleneck restricting the rapid development of China's LED industry. Industry development is urgently needed to adjust industry standards to follow the development of the industry. It is necessary to continuously update relevant technical indicators and strengthen the mandatory certification system and market access system for safety regulations. The industry needs to strengthen information exchange, understand the development of the industry, and avoid homogenization. Blind investment in low-quality products, guiding capital and technical forces to invest in industrial upgrading and cross-border applications; to strengthen exchanges with universities, research institutions, industry associations and other industries, to find new application development directions, such as: plant factories , visible light communication, etc., to achieve the purpose of diverting part of excess capacity. In fact, it is necessary to strengthen the LED industry, strengthen the top-level design and overall arrangement of resources, concentrate power, integrate resources, and optimize industrial resource allocation. Market rules have always been the survival of the fittest, guiding and supporting leading enterprises with relevant technical background as the main body, strengthening key links, key components, key common technologies and major products including epitaxy, chips, packaging, LED application products and supporting raw materials and equipment. Technical breakthroughs, forward-looking next-generation advanced technology projects, and strive to take the lead in the new round of technology competition. The industry itself must also regulate and self-discipline. The most criticized by the various companies in the industry is that there is no unified industry standard to regulate the development of the entire industry. In fact, apart from the support of the government, it relies entirely on its own development. Enterprises can only rely on their own technology and capital industry chain. Standards and technologies are inseparable. China's LED industry has been restricted by technology for many years. Only by mastering core technologies can we go abroad and establish a foothold in the industry. Enterprises should agree on a reasonable price range on the premise of the overall cost price level. Exceeding this price range is regarded as malicious competition and will be jointly sanctioned by industry enterprises. In order to achieve the sanctions, the contracting companies can be pre-collected with margins and establish an internal financing system for the industry organizations so that they have sufficient financial resources to impose internal sanctions on the largest companies, prohibit suppliers from providing production materials, and prohibit distributors from acting on their products. For the enterprise itself, Li Xin, general manager of Zhaoxin LED, believes that the stronger the strong is the law of enterprise development, the enterprise should not be obsessed with the old and passive waiting, the small enterprise should concentrate on developing the market segment and do a small and beautiful field, especially Investing in the development of unique, core products; while large enterprises should maintain the main battlefield and develop auxiliary battlefields. With the rapid development of the industry, it is more urgent to promote LED standardization. At present, the LED industry standard system is still not mature and complete, the standard gap is large; the standard technical indicators are backward, and the standard implementation feedback is poor; the LED industry has many kinds of technologies, multi-disciplinary crossover, and fast technology update, which makes the matching in standard setting. Coordination is difficult to guarantee. In addition, enterprises should actively fulfill their social obligations and responsibilities and establish a sound voluntary recall system. For products that have already been sold, once a production link is found to have problems, the batch product may have quality problems, and the problem product should be actively recalled in the first time to eliminate the influence of the bad product on the customer or reduce the damage of the product to the customer. In particular, avoid creating a safety incident.