The domestic LED lighting industry, which was once highly anticipated, is facing a big test. In the past few years, large and small companies have entered the Nuggets. However, the aftermath of blind expansion of production capacity is increasingly prominent: terminal prices have been falling all the time, serious oversupply in the upstream and downstream of the industry, and uneven product technology.
At the moment, the frenzied LED tide has cooled down. How to open the demand for the civilian market has become a problem that enterprises have to face.
Structural overcapacity
High industry expectations, low entry barriers, attractive potential markets, and support from national policies – these are considered to be the main reasons for the rapid heating of the LED industry.
The "Semiconductor Lighting Energy Conservation Industry Plan" jointly prepared by the six national ministries and commissions recently outlines a fascinating blueprint for this. The plan proposes that in the future, the output value of LED lighting energy-saving industry will increase by about 30% annually. In 2015, it will reach 450 billion yuan. Only lighting application products will account for 180 billion yuan, and the market share is expected to increase to more than 20%.
However, on the other side of the good, it is a cruel reality. Looking through the 2012 annual report of listed LED companies, we can see that the performance of almost all companies has fallen sharply.
In the upstream of the industrial chain, Huacan Optoelectronics and Dehao Runda's net profit fell by 29.93% and 57.14% respectively; the LED crystal material supplier Fujing Technology's net profit fell by 36.50%; LED luminescent materials company Keheng shares fell by 80.62. %; LED packaging company Hongli Optoelectronics, Guoxing Optoelectronics net profit fell by 35.27%, 67.36%. "The problem now is that the upstream production capacity is severely squeezed, the downstream market has not been opened, and the competition among enterprises is too fierce." A person in charge of a LED company in Guangdong said in an interview.
An industry insider also said that behind the LED fever is overheated investment. He believes that LED companies have always relied on government projects for their revenues, and government orders are mostly concentrated in listed companies. In addition, financial subsidies from the government have also kept LED companies in a state of “feedingâ€.
Take the LED chip company Sanan Optoelectronics as an example. From 2010 to 2012, Sanan Optoelectronics received government subsidies of 328 million yuan, 805 million yuan, and 253 million yuan, accounting for 40.5%, 86%, and 60.4% of the net profit of the year. In other words, about half of its performance contribution comes from government subsidies.
Such cases are everywhere in LED listed companies. This has indirectly led to a large number of companies that actually lack technical reserves and market channels to join the LED industry and expand.
"The LED industry has developed rapidly in a short period of time, and the number of LED companies has also surged in a short period of time. However, there are many small enterprises and fewer brands with scale. At the same time, there are many upstream enterprises, few downstream enterprises, and the structure is not balanced. Said the industry insiders.
The person in charge of a LED company in Guangdong also believes that the current terminal demand for the LED market has not actually declined, but a “structural overcapacity†has emerged. For example, the upstream chip production exceeds the actual demand of the middle and lower reaches; in the high-end lighting field, for example, domestic manufacturers do not have too much market share, and the middle and low-end market has another group of melee and mutual price wars.
In any case, shuffling has begun. In 2012 alone, more than 20 companies were forced to withdraw from the market. More than 80 LED chip companies have only had more than 50.
E-commerce breakout
“The 2013 conference is a very crucial year for the LED industry.†At an industry internal seminar held in Guangdong at the end of April this year, this view was almost unanimously recognized by the leaders of the participating companies.
Gong Weibin, chairman of Shenzhen Ruifeng Optoelectronics Co., Ltd. believes that although the supply and demand of the LED industry are beginning to show signs of warming up, whether it is a midstream enterprise or a downstream enterprise, "if it is not working, it will probably Missed the last chance."
In mid-March this year, Shenzhen City suddenly abolished the "Notice on Printing and Distributing the Shenzhen LED Industry Development Plan (2009-2015)" and did not announce any explanations and reasons. One of the arguments about this is that the government is worried about the current overcapacity in the LED industry and intends to “cool downâ€.
In this grim context, how to develop a civilian market will become crucial. This means that companies have to start a complex and all-encompassing change that will involve the entire life cycle of the product.
"Take a bulb lamp as an example. For a production company, if it is for consumers, how do you stock up and what kind of quality to do, this may be different from the requirements when you do the project. Because of the product The nature is different, the research and development, raw material reserves are completely different, including your business model, the structure of the dealers will be different." Guangzhou Guangwei Lighting Technology Co., Ltd. general manager Chen Wei explained.
Among them, especially the construction of terminal channels is very important, which is also an obvious short board compared with traditional lighting. Most of the traditional lighting channel construction has been very mature, so even if there is no environmental protection, energy saving, long life and other advantages of LED products, its long-term market channel accumulation makes it always maintain a place in the market.
In fact, the curtain of changes in the LED channel has been opened. Since 2012, many LED companies in the industry have begun to plan their own channels, trying to “sell†products directly to consumers. The e-commerce channel is greatly welcomed by LED companies due to the relatively new mode and relatively low initial investment costs.
Shenzhen Zhouming Technology Co., Ltd. is doing some similar attempts. In early 2013, it moved its products to Taobao's Tmall flagship store and began testing water and electricity sales.
Mei Zhimin, director of the brand department of Chau Ming, revealed that since its launch on January 4 this year, the Tmall store has sold 70,000 yuan in January and 90,000 yuan in February, and it has soared to more than 300,000 yuan in March. He said that the next online store of Zhou Ming in Jingdong and Suning Tesco will also be launched. "Ample online traffic will help us to support our offline channels and further open up the civilian market." Mei Zhimin said.
(This article is reproduced on the Internet. The texts and opinions expressed in this article have not been confirmed by this site, nor do they represent the position of Gaogong LED. Readers need to verify the relevant content by themselves.)
Trench Cover,Trench Drain,Drain Cover,Steel Trench Covers
Hunan Furui Mechanical and Electrical Equipment Manufacturing Co., Ltd. , https://www.thresher.nl