LED survival defends the battle to break through

In the outpost of the previous period, Xiao Bian analyzed the status quo of the LED lighting industry from the aspects of industrial environment, market layout, and cross-border competition. At present, the LED lighting market relationship is still far from supply, and as the industry competition further intensifies, For most LED lighting companies, profitability remains difficult. Even the powerful traditional lighting giants, or LED cutting-edge companies that are rapidly taking up positions in recent years, face the pressure of survival that is completely different from the traditional lighting era. Especially for small and medium-sized LED companies, the key is how to survive in the competition between big brands and cross-border people, and to find a good road for business development.

Breakthrough in R&D Breakthrough LED Technology

In 2014, in addition to the further release of LED lighting market capacity, the market competition will be more intense, but the competition of LED is ultimately the competition of technology, and the technology requires a long period of knowledge accumulation and experimental testing. At present, the domestic LED R&D technology is relatively decentralized, while the quality and performance of foreign brand LED products are superior to domestic products, especially in optical design and product intelligent control.

Traditional lighting companies have obvious advantages in brand image and sales channels, but may be a disadvantage in LED R&D technology. In recent years, most of the LED lighting companies that have emerged in the industry belong to the technology-based high-tech enterprises. They are mainly engaged in the research and development, production, sales, and technical support of LED lamps and lanterns, and have mastered more advanced marketing concepts. The disadvantage is that brand awareness is not high.

LED SMEs are relatively weak in all aspects. To achieve leap-forward development, we must first break through the weak R&D strengths. Song Gang, vice president of Shenzhen Haowei Photovoltaic Lighting Co., Ltd. suggested that in the early stages, small LED companies could develop their businesses through the purchase of industry association technology or through corporate marketing capabilities; if the company's scale reaches the medium-term stage, it needs to change its development strategy. Through in-depth research on the market, clear the future development trend of LED lighting products, and actively invest a lot of resources to enhance R & D strength, and competing with the LED lighting market.

In order to further break through the technical bottleneck, LED SMEs can also cooperate with professional colleges in production, education and research to achieve resource grafting, complement each other's advantages, and cultivate professional reserve forces. At the Advanced Lighting Technology Forum recently held in Shanghai, Dr. Lin Yandan of the Department of Light Sources and Lighting Engineering at the Information School of Fudan University stated that only a close combination of production, learning, and research can change the destiny of China to become the world's lighting factory and improve China’s World lighting industry status.

At present, homogenization of products on the market is becoming more and more serious, and price wars have caused many companies to have no profit. Consumers are pursuing cost-effective products that require suitable product prices and stable performance. LED small and medium-sized enterprises need to have a clear R&D goal to ensure the performance and reliability of the product. At the same time, they constantly innovate products to meet the growing needs of consumers.

The channel breaks through the narrow road and meets the brave winner.
With the ban on sale of incandescent and fluorescent lamps and the large population base in the world, the LED lighting market in China was induced to enter the outbreak phase in 2014. However, the development of the industry cannot escape the game rules of “sufficiency of the survival of the fittest”, and the outbreak period of the LED market is practical. This is the "out phase" of the entire industry.

Based on the market's advantages and the improvement of technology, LED companies of all major camps began to exert force in 2014 to further accelerate the popularity of LED lighting and rapidly reduce the cost of products. Not only did new LED lighting companies actively deploy the light source market, but traditional lighting companies with the advantages of brands and pipelines also actively adopted the two-pronged approach of network and physical stores to expand LED lighting business. For what kind of companies can make the final breakthrough, Tang Guoqing, the secretary general of the Semiconductor Lighting Technology and Application Committee of the China Illuminating Society, believes that the narrow road meets the brave winner and the traditional lighting companies have many years of industry experience and the chances of winning are even greater.

LED lighting products are gradually accepted by the market, and channel innovation has always been a matter of corporate thinking. LED lighting industry has different channels, such as circulation, e-commerce, Internet, engineering, designers, etc., but the company's suit or match which channels need to be related to the company's products and strategies. For example, in LED downstream applications, many lighting companies are busy competing for distribution channels. In fact, the traditional large circulation channels are not necessarily the best channels for LED applications. Enterprises need to change the concept that dealers and manufacturers are no longer a kind of relationship you buy and sell, but are more responsible and common. Share the benefits of cooperation. In fact, after entering the LED era, product replacement is very fast, so there is no need for excessive stocks. In the past, the traditional sales model has not adapted to the development of the market.

In recent years, many small and medium-sized enterprises have started a wave of closures, and many manufacturers have seized the opportunity to conduct mergers and acquisitions, integration and other actions. As with other industries, the advantages of future LED lighting industry resources will be increasingly concentrated to the oligarchs, predictably that the market will reshuffle. “In the future, there will be a large number of mergers and acquisitions in the industry. When the transitional period is completed, there will be 10 billion enterprises in the LED lighting industry, and one of the future industry layout criteria will be the listing or the scale of billions of dollars.” Vice President of Guangdong Mei Lighting Electric Manufacturing Co., Ltd. Manager He Weiru said.

In general, LED SMEs need to combine their own characteristics, including resources in R&D, production, channels, and capital strength, as well as their own product market capabilities, to select the appropriate market segments and channels, and develop market-friendly products. The product line, supplemented by innovative marketing methods, coupled with the right price strategy, can achieve more satisfactory results.

Brand breaks down to the ground

Technology and channels are not the absolute conditions for the survival of LED lighting companies. The brand is the ultimate "weapon." As the market economy becomes more mature, the signs of the brand's strength in LED companies and product quality assurance become more obvious. The higher the company’s brand awareness and reputation, the more market share it will occupy.

According to the survey, most of the LED lights that are generally accepted by consumers in the market are produced by traditional lighting companies with brand awareness, and some have cost-effective LED lights, because consumers do not recognize new brands. Deep, failed to achieve the desired degree of popularity. This is due to the accumulation of traditional lighting brands for many years, the brand influence, so in the current flood of low-quality LED products flooded the market, consumers are more trust in their product quality. At the same time, the traditional lighting brand products are generally positioned in the high-end, before the LED products do not have in-depth understanding, consumers generally do not spend too much money to buy LED products. This is the opportunity for new LED lighting brands to start branding and seize market share.

The height of the brand takes time to accumulate, and it requires the company to go step by step. The LED lighting brand at this stage is still in the stage of “product competition”, and the company hopes to demonstrate its own strength through different methods. Some companies have stated that the price war is a key factor in determining the outcome of the game, but only having the core competitiveness is not enough. Enterprises that do not have accurate brand positioning in the LED market may also be eliminated. In this fierce competition in the industry, companies with a long-term brand vision, focus on product development and innovation, do not follow the flow of companies can be better developed.

postscript

It is understood that the lighting industry and home appliance industry monopoly situation is different, the overall market share of the brand companies in the lighting industry actually only accounted for single digits. There are industry analysts, this is due to the diversification of lighting products and channels. In the era of traditional lighting, because the technical barriers and product specifications of light sources are relatively single and suitable for large-scale production, global lighting brands have appeared in light source companies. If there is no LED, lighting companies need to go through acquisitions for rapid development, and small businesses will survive in the cracks.

At present, the domestic LED lighting market is still a chaos, and new LED lighting companies have therefore been given opportunities for development. Innovation breakthrough is one of the development directions of the future lighting industry. For the new LED lighting companies to survive for a long time, they must occupy the market share. In addition, the company must replace traditional lighting products while implementing innovations. Because LEDs from the replacement market to the design market and finally to the application market need a longer evolutionary process. Under the premise of not blindly following the price war, companies need to break through the homogenization of products from the technical point of view.