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In the past few years, the temptation of policy and future growth potential, coupled with the low barriers to entry, the various funds have piled up the LED lighting industry, resulting in downstream vicious competition, corporate profits have fallen sharply, and there has been a collapse. As of the end of 2011, there were more than 80 LED lighting companies in Shenzhen, and most of the more than 2,000 LED companies in the city belonged to the low-end areas of packaging and applications, and semiconductor materials critical to product production. The production of phosphors is not even a family. How to explore foreign emerging markets in the face of various barriers? Looking for a breakthrough in the industrial dilemma?
Domestic lighting companies have struggled with barrier industry development in the past few years. Due to the temptation of policies and future growth potential, coupled with low barriers to entry, various funds have piled up LED lighting industry, causing vicious competition downstream, corporate profits have fallen sharply, and collapses have occurred. tide. As of the end of 2011, there were more than 80 LED lighting companies in Shenzhen, and most of the more than 2,000 LED companies in the city belonged to the low-end areas of packaging and applications, and semiconductor materials critical to product production. The production of phosphors is not even a family.
At this stage, China's LED lighting products, the main market is still concentrated in developed markets in Europe and the United States, especially in the European market. The economic downturn in Europe and the United States and the obstruction of LED exports have made the entire industry more difficult. As the leader of the national LED industry, Guangdong is also suffering from the impact.
The impact of the European debt crisis on China is short-term and limited. The main impacts are as follows. The first is the impact on exports, which led to a decline in economic growth in the euro zone countries. The EU is China's largest export market, and its current share of China's export market is between 18 and 21. Therefore, if foreign demand from the EU declines, trade protectionism will rise and the export situation will not be optimistic. Secondly, the European debt crisis has caused global risk aversion to increase, funds have returned to the US dollar, China has faced short-term capital from inflow to outflow, investment has slowed down, and economic growth has been affected. If the RMB continues to appreciate, or China has introduced stimulus policies, It will lead to more short-term capital inflows, putting more pressure on domestic inflation and asset prices.
The economic downturn in Europe and the United States is indeed an important reason for the dilemma of the LED lighting industry, but in fact, the blindness of various funds is the root cause of LEDs in trouble. The enthusiasm of capital for LEDs is largely due to the increasing support of the state and local governments for the industry.
The temptation of favorable policies and huge growth potential in the future, coupled with the low barriers to entry in the LED lighting industry, many small-scale, small workshop companies can also easily enter, so there has been a wave of LED lighting in various channels. .
In addition, affected by inflation, the rise in labor costs and logistics costs has also plagued the development of enterprises, and the production costs have increased by two to 30%.
Although the cost of LED enterprises has increased significantly, due to the economic downturn and fierce competition in the industry, most companies' products are hard to raise prices. In order to maintain the normal operation of the factory, they can only bear the fact that profits are getting thinner.
Emerging country markets or gold mining?
Since 2008, as the demand in the European and American markets has been reduced due to the financial crisis, the importance of global emerging markets has also been increasingly concerned by manufacturers: South America and South Africa have developed rapidly in recent years, and Zhen Mingli has gradually increased since last year. The development of the South American LED lighting market led by Brazil, the first LED tunnel light project in the Brazilian city of Sao Paulo is the AyrtonSenna tunnel made by Yinyu Lighting of Hong Kong Zhenmingli Group. It is the first LED lighting fixture in South America. The highway, LED lighting application is an iconic project in tunnels and highways.
In the South African market, there are also active presences of Chinese companies. Zhang Qingyu, vice president of NVC Lighting, said that South Africa has become one of the best overseas markets for NVC sales. In South Africa, the business model of NVC dealers has become increasingly mature. At present, there are mainly wholesale channels, professional channels, and modern supermarket channels.
The Middle East market has a large demand for low-priced products. In the Middle East, for example, the UAE and other countries in the Gulf region are currently experiencing economic booms. The development of retail, trade and real estate industries has driven demand for lighting equipment, while Dubai and other parts of the UAE The growth of the population has also driven the development of the lighting industry. In addition, Russia and Eastern Europe are also a potential big market, and many companies have also shown interest in the Russian and Eastern European markets.
Affected by the European debt crisis, many European countries are cutting government spending, which has led to a sharp decline in lighting in the European market for government procurement and municipal engineering, but for emerging markets in Southeast Asia including Vietnam, India and Thailand. At the same time as it is the first to usher in economic recovery and development, the construction of infrastructure will greatly promote the development of its market lighting industry.
With the development of the economy, the urbanization process of Southeast Asian countries will undoubtedly be greatly accelerated. LED lighting will undoubtedly occupy an extremely important position in the process of urbanization. The demand for LEDs for commercial lighting and urban street lamps will be greatly increased. increase.
ASEAN is currently the third largest regional organization in the world after North America and the European Union. With a population of 576 million and a gross domestic product (GDP) of 150.6 billion US dollars, it has a unique advantage in the trade-related zero-tariff policy of the China-ASEAN Free Trade Area. As the world's largest LED lighting production area, China has formed a huge industrial chain in the middle, lower and middle reaches of LED. The comprehensive advantages of the industry are quite obvious. Although the Chinese mainland market also has great development potential, it is very complicated for the industrial chain. In terms of the number of enterprises, the competition situation is still grim. At this time, the ASEAN market is more like an untapped virgin land. The ASEAN Nuggets are a smart move for the strategic layout of the global economic crisis.
In summary, a series of data and examples show that in addition to Europe, Japan and other countries where LED lighting demand is huge, emerging markets for LED lighting are gradually emerging. For companies that are still focusing on developed regions such as Europe, America and Japan. In terms of development, the development of an emerging international market is undoubtedly a way out during the current downturn in the international market.
Are the domestic companies in the Nuggets emerging markets ready?
China is a major exporter of LED lighting products, but due to product quality problems, in recent years, China's LED lighting products have encountered many recalls in the European and American markets. Frequent recalls have not only affected the current revenue of Chinese LED lighting manufacturers, but also affected future orders, and even caused overseas markets to form a crisis of confidence in Chinese-made LED lamps in the short term.
Lev, president of Russia's OPTOGAN company, once pointed out that the biggest problem of LED energy-saving lamp products made in China is that the quality is inferior, does not meet the relevant technical standards and environmental protection requirements, and has a low service life and is easy to cause harm to the human body. Lev stressed that some of the lesser-known companies in China have no sales performance and popularity, but they are keen to lobby the local government and participate in government procurement in the country and region, resulting in Chinese products entering the Russian market.
Faced with such critical opinions, Chinese lighting companies should indeed reflect on the quality of their products. On the one hand, SMEs do not have the ability to compete in the high-end market in Europe and the United States, because European and American buyers often put forward various certification requirements before placing orders, and some certifications are often expensive. Therefore, the emerging market market with low market entry threshold and no quality certification for products has become a gold mining place for manufacturers and buyers.
On the other hand, the prospects of foreign emerging markets are still good, and domestic lighting companies should also strengthen export self-discipline. This is also a yardstick for testing the maturity of enterprises and the social responsibility that every enterprise in the industry should have. Companies should abide by international trade practices on a self-regulatory basis, thereby reducing trade frictions.
At the same time, it avoids the formation of an increase in the number of exports, the decline in economic efficiency, and the unfavorable situation of frequent crises. Otherwise, this will become a patent barrier and another obstacle to restricting China's LED products to the international market. In addition, while selecting the target market positioning, export companies should also develop diversified markets. Taking the market diversification strategy will have a positive effect on improving the product quality of the enterprise and improving the technical level.