LED lighting lacks individuality SMEs how to find a way to survive?

January 14, 2020

“Pre-corruption” is used to describe the LED lighting market may not be suitable, but there is such a situation: LED lighting is far from popular, the entire Chinese traditional lighting companies have begun to flood into this market, reincarnation into low quality and low price In the disorderly competition. If "photovoltaic" is a bubble, then LED has not seen the bubble, it is already old.

Fortunately, almost no one doubts that LEDs will eventually enter every corner of the globe. This market is terrible enough to feed the current lighting companies. But it takes time. Maybe the Chinese market will enter the LED era more quickly, and Europe and the United States, which is more environmentally friendly, are also worth looking forward to.

More importantly, how do LED companies achieve self-purification in this process? LED lighting entry threshold is low, but lacks the personality that should be, how can SMEs find their own way of survival?

On April 25, Wu Yulin returned to China from Frankfurt. He spent two weeks in this famous industrial city in Germany. In addition to participating in the world's largest lighting exhibition, he also visited many old customers.

At the exhibition, Wu Yulin saw a phenomenon: 95% of the global LED lighting fixtures were purchased from Chinese companies. This made him happy. The scale and professionalism of China's LED lighting industry made it almost impossible for orders to move like textiles to Southeast Asia. At least for a few years, there was no such concern.

However, the European economic recession is a more headache. At the exhibition, Wu Yulin’s company’s orders for Kaixiou Lighting were all from old customers, and they could not be ordered by new customers. Other manufacturers also had such a phenomenon, reflecting the weakening of customer demand and barely maintaining the original orders. In May and June, Foshan LED lighting exports fell to the bottom, and then slowly recovered.

For Casey, which relies on exports at 95%, strengthening domestic market expansion is an inevitable choice. However, under the situation that the public project market has become a “minority game”, how to develop the commercial photo and home market? In any case, the domestic market is becoming more and more fierce as more and more export-oriented domestic companies such as Casey are involved.

Enterprises swarming into the market and causing prices to fall
"At the beginning of the year, I went to Hong Kong to participate in the exhibition. A 3W LED bulb called 20 yuan will make the whole venue boil, but now the lowest price of 3W bulb has reached a single digit." Chen Wenji, director of operations of Foshan Lighting LED Division.

This point Wu Yulin has a deep understanding. He told reporters that at the beginning of the year, the unit price of LED chips per watt was about three, and now it has fallen to a five.

In the past few years, the LED upstream chip field has invested heavily, the price has dropped to 30% in 2010, the performance index has doubled in 2010, and the average price in the packaging field has dropped by 40% compared with 2010, and the performance is also improving. But relatively slower. "The price of terminal application products is also falling. The original 300 yuan product is consistent with the basic performance of the current 200 yuan LED product."

The swarming of companies into the LED industry is one reason for the rapid decline in prices. Wu Yulin said that now 80%-95% of lighting companies in Foshan are transforming into LEDs, and even large companies like Snowlight, which focus on special lighting, are beginning to get involved.

Because the price has dropped too fast, buyers are almost afraid to place orders because the price changes too fast and the chip will be cheaper at any time.

This makes the company very embarrassing. Wu Yulin said that Kaisiou basically did not dare to hold inventory, customers ordered, they will buy packaged chips. During the 45-day delivery period, the losses caused by price fluctuations can be tolerated.

Some companies have suffered huge losses. “This year the association conducted research and went to two companies that we thought were doing very well, and found that they actually lost money.” Wu Yulin is also the president of Foshan Lighting Association. He told reporters that these two companies are because The inventory is too large and the value of the goods is too fast.

However, the market performance is not good, not the full price reason, demand is the fundamental problem. “In May and June, Foshan’s LED lighting exports fell to the bottom, and then slowly recovered.” Wu Yulin said.

“Many customers are worried about the European economic trend. In addition to the fact that German customers basically maintain purchasing power, customers in other European countries are greatly affected.” Wu Yulin told reporters that 80% of Kathy's orders were sent to Germany.

In China, real estate regulation has also implicated LED lighting, but more problems are that the speed of commercial and home market development is not ideal.

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