Deep integration of industry chain G20-LED summit will explore new path

After a few years of investment boom, the scale of China's LED industry has continued to grow, but the overcapacity caused by it has also emerged. In 2012, the upstream and middle reaches of the LED industry experienced a cruel price war. Many companies have experienced the phenomenon of “incremental increase in revenue” or “increasing income without increasing profits”.

Despite this, mainland China is still the most active region in the global LED industry. On the one hand, international companies cannot deny that the Chinese mainland market is a source of performance, and they are rushing to the top. On the other hand, mainland manufacturers are accelerating independent research and development, combining channel construction and innovation, highlighting high-end and differentiation, and striving to seize the market.

On March 8, 2013, the G20-LED Summit CMO meeting will be held in Jiaxing, Zhejiang. The theme of this summit is “Resource Integration, Win-Win Future”. On the eve of the meeting, "High-tech LED" interviewed some representatives of the member companies of the G20-LED Summit on the hot topics of market prospects and lighting channels in all aspects of the LED industry chain.

Mid-upstream integration and joint trend are obvious

In 2012, China's LED upstream and downstream, the overall market demand for epitaxial chip and packaging market continued to increase, but overcapacity caused competition in the packaging industry to intensify, product prices have been falling, and gross profit has dropped significantly. For example, the gross profit of packaging companies has dropped by about 30% compared with 2011, and it is generally faced with an increase in profits.

In order to cope with the low gross profit of packaging, many packaging companies are now expanding to downstream applications, followed by a series of issues such as channels and brands.

Peng Chengxue, deputy general manager of Hubei Gengtong Electronics Co., Ltd., said that each company faces different situations and the methods for dealing with these problems are not the same. The idea of ​​Tongtong is still operated in the way of “complementary advantages and strong alliances”, and seeks common development through media and related resources of advantageous manufacturers in the industry.

In 2013, the packaging market reshuffle will continue to increase, the integration trend of the packaging industry will become more obvious, and the industry concentration will be relatively higher. This trend in the chip market has begun to become prominent.

Lighting opened the channel construction curtain

In 2012, the LED lighting market was mainly concentrated in outdoor street lights and tunnel lights. Indoor lighting began to enter the market slowly, but it was mainly used in some commercial offices. When the price of indoor lighting products is more "popular", this market will have a "blowout" effect. After all, this is also the mainstream market for lighting products.

The deep opening of the indoor lighting market also means that LED lighting products will eventually move to a larger market outside the project. For domestic scale enterprises, channel construction cannot be ignored, but also the relationship with brand promotion should be handled.

To some extent, channel construction and brand promotion are mutually reinforcing. Sales need certain channel support. Channels are the main display and propaganda positions of brand culture and brand image.

Zhou Shuiming, general manager of the marketing center of Foshan Nanhai Jiamei Times Lighting Co., Ltd., said: "The uniformity, exposure and continuity of the brand will be reflected in the channel, and with the channel construction. The subdivision and promotion of upgrading, brand-driven sales and enterprise value-added improvement is immeasurable, and a long-term development of corporate brand image construction and channel construction is synchronized."

In the view of Zhong Mingzhu, the domestic sales manager of Shanxi Guangyu Semiconductor Lighting Co., Ltd., the member of G20-LED Summit, the brand is focused on the surface, and the channel is focused on the line. Only through the channels of the channel can the various aspects of the brand be organically linked. Better explain the foundation of a company. Conversely, LED companies can only promote their channels and brand construction if they build their own foundations more solidly. Otherwise, they will be castles in the air.

Although there are many places worthy of reference in the traditional lighting mode, LED companies must have the innovation of the integration enterprise based on the previous successful channel model.

At present, the stores established by most manufacturers have appeared the phenomenon of “selling and not calling”. Zhou Shuiming pointed out that the whole market is now in the transition period from LED lighting replacement to popularization. The proportion of engineering projects is large, and the general manufacturers can only provide support and guidance in the construction of the store model. In order to break through this dilemma, it must be done. Good store support system, such as business promotion support, store management support, promotion support, and even business development radius planning.

"Not all emerging channels are fully suitable for LED enterprises. At present, e-commerce is getting more and more attention from enterprises." Zhou Shui-ming reminded that because product prices and market protection and distribution services cannot be achieved, at this stage, for LED lighting companies, It may not be time to put too much energy and financial resources on e-commerce.

For the EMC model that is currently being criticized, Zhong Mingzhu believes that EMC mode is not the only business model adopted by LED lighting. "The more important thing for LED lighting companies is to train their internal strengths, focus on the improvement of product quality and the enhancement of the company's service capabilities. Of course, if there are suitable projects, the EMC model can be appropriately implemented after the evaluation is passed."

As the competition between traditional lighting companies and emerging LED lighting companies is intensifying, mergers and cooperation between enterprises will be further developed. In the future, there may be channel alliances or channel integration and acquisition, and even agents and enterprises will hold each other. The phenomenon of stocks is also impossible.

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