Domestic lighting companies want Nuggets emerging markets

In the past few years, tempted by policies and potential for growth in the future, coupled with low barriers to entry, various sources of funds have lumped together the LED lighting industry, causing vicious downstream competition, corporate profits have fallen sharply, and there has been a wave of closures. As of the end of 2011, there were more than 80 LED lighting companies in Shenzhen alone, and of the more than 2,000 LED companies in the city, most were in the low-end areas of packaging and applications, and semiconductor materials that were crucial to product production. , phosphor production companies are not even a family. Faced with all kinds of "barriers" how domestic companies should explore foreign emerging markets? In the industrial dilemma in the search for a breakthrough in the development of "treasures"? Aladdin lighting news network and you one by one analysis.

Domestic lighting companies encounter "barrier" industry development "difficult"

In the past few years, tempted by policies and potential for growth in the future, coupled with low barriers to entry, various sources of funds have lumped together the LED lighting industry, causing vicious downstream competition, corporate profits have fallen sharply, and there has been a wave of closures. As of the end of 2011, there were more than 80 LED lighting companies in Shenzhen alone, and of the more than 2,000 LED companies in the city, most were in the low-end areas of packaging and applications, and semiconductor materials that were crucial to product production. , phosphor production companies are not even a family.

At this stage, China's LED lighting products, the main market is still concentrated in Europe and the United States developed markets, especially the European market. The economic recession in Europe and the United States, LED exports blocked, resulting in the entire industry more difficult. As the leader of the nation's LED industry, Guangdong is also affected by the impact.

The impact of the European debt crisis on China is currently short-term and limited. The main effects are the following two aspects. The first is the impact on exports. The crisis has led to a decline in economic growth in the euro zone countries. The EU is also China's largest export market, which currently accounts for about 18% to 21% of China's export market. 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 led to aggravating global risk aversion. Funds have returned to the US dollar. China is facing short-term capital from inflows to outflows. Investment has been slowed down, and economic growth has been affected. If the RMB continues to appreciate, or if China reintroduces stimulus policies, It will also 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. However, in fact, blindly gathering all kinds of funds is the fundamental reason why LED is in trouble. The enthusiasm of the capital for LED enthusiasm has largely “gained” the increasing support from the national and local governments in supporting the industry.

The temptation of favorable policies and the potential for huge growth potential in the future, coupled with the low barriers to entry for LED lighting industry, many small-scale, small workshop companies can easily enter, so there have been various sources of funds have gathered LED lighting upsurge .

In addition, due to the impact of inflation, the increase in labor costs and logistics costs also plagues the development of enterprises. Production costs increase by 20% to 30%.

Although the cost of LED companies has increased significantly, due to the economic downturn and fierce competition in the industry, the vast majority of companies' products are difficult to price, and in order to maintain the normal start-up of the factory, they can only accept the fact that profits have become thinner.

Emerging countries market or become a "gold rush"?

Since 2008, as the demand of 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: the South American and South African markets have developed rapidly in recent years, and since the beginning of last year, Neo-Neon has gradually increased The development of LED lighting market in South America headed by Brazil, the first LED tunnel light project in the city of Sao Paulo, Brazil’s central city, is the first Ayrton Senna tunnel made by Yinyu Lighting of Hong Kong’s Zhen Mingli Group. It is the first LED tunnel lighting system in South America. The highway, LED lighting applications in tunnels and highways landmark projects.

In the South African market, there are also active figures of Chinese companies. Zhang Qingyu, Vice President of NVC Lighting, stated that South Africa has now 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. Take the Middle East as an example. Currently, the UAE and other countries in the Gulf region are in a period of economic prosperity. The development of retail, trade and real estate industries has led to the demand for lighting equipment, while Dubai and other UAE regions The increase in population has also led to the development of the lighting equipment industry. In addition, Russia and Eastern Europe are also potential big markets, and many companies have also shown interest in Russia and Eastern Europe.

Affected by the European debt crisis, many countries in Europe are cutting government expenditures. This has led to a sharp contraction in the European market lighting equipment market in the government procurement and municipal engineering construction, but for emerging markets in Southeast Asia including Vietnam, India, Thailand, etc. At the same time that it has ushered in economic recovery and development, the construction of infrastructure will, to a large extent, promote the development of its market lighting industry.

With the development of economy, the process of urbanization in Southeast Asian countries will undoubtedly be greatly accelerated. LED lighting will undoubtedly occupy an extremely important position in the process of urbanization. Commercial lighting, urban street lamps and other LED demand will be greatly improved. increase.

Asean is now the world’s third largest regional organization after North America and the European Union. With a population of 576 million and a gross domestic product (GDP) of 156.2 billion U.S. dollars, China has a unique advantage in zero-tariff policies in the China-ASEAN Free Trade Area. As the largest LED lighting production area in the world, China has formed a huge industrial chain in the upper, middle and lower reaches of LED industry. The comprehensive industrial advantages are quite obvious. Although the Chinese mainland market also has great potential for development, it is also a complicated industry chain. For the number of companies, the competitive situation is still grim. At this time, the ASEAN market is more like an undeveloped virgin land. ASEAN's Nuggets are a wise move in the strategic layout of enterprises in the global economic crisis.

From a series of data and examples, we can see that in addition to countries with large LED lighting demand in Europe, America, Japan, and so on, the emerging markets for LED lighting are also gradually emerging. For companies now looking at developed regions in Europe, America, Japan, etc. In terms of development, the development of an emerging international market is undoubtedly a way out for the current downturn in the international market.

Isn't the "Nugger" emerging country market ready to go?

China is a major exporter of LED lighting products. However, due to product quality issues, China's LED lighting products have encountered many recalls in Europe and the United States in recent years. Frequent recall events not only affect the current stage of China's LED lighting manufacturers' revenue, but also affect future orders. They may even cause overseas markets to create a crisis of confidence in Chinese-made LED lamps in the short term.

Russia's OPTOGAN President Lev once pointed out that the biggest problem of LED energy-saving lamp products made in China is poor quality, does not meet the relevant technical standards and environmental protection requirements, and has a low service life and is likely to cause harm to humans. Lev stressed that some of China’s lesser known companies do not have sales performance and visibility, but are keen to lobby the local government and participate in government procurement in countries and regions, causing Chinese products entering the Russian market to “become the fish”.

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 for high-end markets in Europe and America because European and American buyers often put forward various certification requirements before placing orders, and some certifications are often expensive. Therefore, the markets in emerging countries where market entry thresholds are low and products do not have quality certification are the “gold rushes” for production companies and buyers.

On the other hand, the prospects for foreign emerging markets are still good. Domestic lighting companies should also strengthen self-discipline in exports. This is also a benchmark for testing the maturity of enterprises and is a social responsibility that every company in the industry should have. Enterprises should abide by international trade norms on the basis of self-discipline, thereby reducing trade frictions.

At the same time, it avoids the formation of an unfavorable situation of “increasing export volume, declining economic benefits, and frequent occurrence of a reputational crisis”. Otherwise, this will become a barrier to patents and a further obstacle to China’s LED products going to the international market. In addition, while selecting the target market positioning, export companies should also develop diversified markets. Taking a market diversification strategy will have a positive effect on improving the quality of products of enterprises and improving the technological level.