The growth of the market scale is slowing down, price wars are raging everywhere, foreign companies are retreating one after another, and the prospect of LED is bleak? In order to find a new way out, should LED people cooperate with industry giants for a win-win situation, or conduct special development through independent research and development? What the industry needs is enterprises with foresight and courage to promote the development and transformation of the entire LED lighting industry to intelligent lighting. I believe that in the future, more enterprises will enter the field of intelligent lighting through various methods and channels. Let’s see how Chinese LED lighting companies win surprisingly, and collectively become “smart” to lead the future lighting!
Slowing growth, worrying about the prospects of the LED industry?
According to data, the global LED lighting market size in 2015 was 25.7 billion US dollars, an increase of 44% year-on-year in 2014, and the LED lighting market penetration rate reached 31%. It is expected that the growth of the global LED lighting market will gradually stabilize from 2016 to 2018, some alternative light sources have been replaced, and the market growth rate will stabilize at around 20%.
Judging from the data, the market growth rate of the LED lighting industry is high, but the overall growth rate of the LED industry has begun to slow down. In 2014, the output value of high-brightness LEDs was US$14.2 billion, and the growth rate dropped from 19% in the previous year to 9%. In 2015, the output value rose only slightly, reaching 14.5 billion US dollars, a year-on-year increase of 2%.
The phenomenon of slowing growth also makes domestic LED companies very worried. In 2015, the overall scale of my country’s LED lighting industry was 396.7 billion yuan, an increase of 15% year-on-year in 2014. Compared with the average annual growth rate of more than 30% in the past 10 years, the growth rate has dropped significantly. Not only that, LED industry giants such as Philips, Osram, and Panasonic Lighting have successively announced the sale or spin-off of their LED lighting China, which has to make people worry about the future development of the domestic LED industry.
The price war is intensifying, quality assurance is king!
Since the LED lighting market has matured, the price war in the industry has been very fierce. While complaining, the industry continues to engage in price wars. Last year, the industry launched a price war around LED T8 lamps, and the price fell below the 10 yuan mark, which surprised the industry. Regarding this year’s situation, Wei Liaosong, an electronic engineer of Guangdong Langneng Electric Co., Ltd., directly asserted: “This year may be more cruel than last year.”
Many companies said that a large part of the reason for the price war is that the market is flooded with products with serious homogeneity, and the one with the lowest price wins. After several years of explosive growth of LED, there are too many homogeneous products, and many companies have closed down because of too much price competition. According to industry-related data, about 4,000 LED companies (including upstream chips and midstream and downstream lighting applications) disappeared nationwide in 2015, especially downstream companies. By 2018, the number of companies may be reduced by half.
In addition to serious homogeneity, products that do not meet national standards are mixed in the market for competition, which also intensifies the price war in the LED industry. A number of engineers in the industry said: “If the products in the industry strictly follow the national 3C standards, the price war will not be as serious as it is now. Now many products that do not really meet the national 3C standards also participate in market competition and disrupt market order. This needs to be supervised at the national level.”
It is no longer realistic for the LED lighting industry to discuss how to avoid price wars. Price wars are an inevitable stage for each industry to mature. The LED price war reflects the inadequate implementation of national standards and lack of supervision, but it also indicates that LED lighting companies want to stand out in this industry, and product differentiation will be the future trend.
The price war is mainly concentrated in the low-end market, and certain thresholds have been set for engineering customization and subdivision fields, so as to get rid of the fierce price war in the low-end market to a certain extent, so as to obtain high profits. The fierce price war in the main battlefield has made differentiated products more competitive, and customization and segmentation have also become popular.
However, it is worth noting that the industry unanimously believes that whether it is making differentiated products or entering subdivided fields, technological innovation and quality assurance of products are still the path that must be followed.
State-owned enterprises make efforts, future lighting looks at China
In recent years, key enterprises in the LED industry have successively announced the sale or spin-off of LED lighting business, many of which will eventually transfer the business to China LED lighting Expert.As the leader of European lighting companies, Osram sold its 13.47% stake in Foshan Lighting to Guangsheng Group in 2015. At present, it is preparing to split and sell part of the light source business; Japan’s Panasonic Lighting closed its Shanghai lighting factory and Hangzhou factory in China in 2014, and fully contracted its lighting business; Japan’s Toshiba announced in 2015 due to the impact of the yen’s exchange rate decline and business losses. Withdrew from the white light LED business; the foundry TSMC decided to withdraw from the light-emitting diode (LED) field, and its TSMC solid-state lighting will be sold to Epistar, completely withdrawing from TSMC solid-state lighting.
The withdrawal of foreign companies from the domestic market seems to be a foregone conclusion. Fu Baocheng believes that in the midst of fierce competition, it is only a matter of time before foreign companies withdraw. He said: “Foreign companies have their own production process, including the experiment cycle, development cycle and market wholesale cycle. The whole process may take half a year, and the production speed obviously cannot keep up with the rapid development of the market. Domestic private companies , A product can be released in a month, and it may be sold for two months and the price will be reduced for rectification. The gap between the two in response to the market is obvious, and foreign-funded companies will definitely withdraw from this market slowly.”
There are different opinions on the reasons why many foreign companies withdraw from the domestic market, but more people think that it is because the gross profit that foreign companies can obtain in the Chinese market has declined, and the market competitiveness has declined, so it is better to withdraw in time. Maxic Sales Director Zhong Ming said: “In addition to the fact that foreign companies cannot quickly respond to the domestic market, the corresponding gross profit of the LED industry has indeed dropped a lot. When most foreign companies think that the gross profit can no longer meet their requirements, They will gradually begin to give up this market. It can be said that they are optimistic about the Chinese market, but they have been unable to participate in the competition.”
Many people in the industry believe that the withdrawal of many large international companies in the LED industry from the Chinese market is not only related to gross profit margins, but also related to the continuous improvement of domestic companies’ technology in this industry. With the improvement of domestic companies’ technical level, the core competitiveness of foreign companies has declined. , had to choose to withdraw from the market.
As foreign companies gradually withdraw from the LED lighting field, it has become an industry consensus that Chinese companies will account for an increasing proportion of the lighting industry in the future, and domestic lighting companies seem to usher in a carnival. Some people in the industry also issued a reminder: “Chinese companies may have a large proportion of the low-end market, but in the high-end field, especially in the field of smart lamps and smart lighting, foreign companies are currently leading.” The stage of area promotion will eventually need to be realized by domestic manufacturers. Because China’s family base itself is very large, the derivative lighting market is naturally huge, and local companies have great advantages. Zeng Qiang, an electronic engineer in the technical department of Zhongshan NVC Lighting Technology Co., Ltd., hopes that domestic companies can catch up and go international during the period when domestic companies can withdraw from the Chinese market through foreign companies.
Strong cooperation independent research and development, jointly enter the field of intelligent lighting
Recently, Huawei and Opple Lighting signed a smart home strategic cooperation framework agreement. The two parties have established a close strategic partnership in the field of smart home. One stone has caused a thousand waves. The combination of traditional lighting companies and communication giants has given smart lighting more imagination. space.
Liu Huanwu believes that only when the market recognizes and users recognize that a strong alliance is valuable, the cooperation between Opple Lighting and Huawei plays a leading role in exploration. Zeng Yueming gave more recognition to this strong alliance, and believed that the cooperation between OP and Huawei has a profound impact on the industry. He said: “It is equivalent to injecting high-end technologies in the field of communication and lighting into one product. New lighting products have more functions, and through Huawei’s technology and international reputation, Chinese companies will have more initiative in smart lighting in the future.”
Smart lighting is undoubtedly a major trend in the transformation and development of the indoor Lighting and outdoor lighting industry. Strong alliances are a powerful way for traditional lighting companies to enter smart lighting. However, under the general trend, small and medium-sized LED lighting companies also have their own coups. Xie Yanchi, director of RD of Guangdong Liangdi Lighting Co., Ltd., said that it is not necessary to join forces. Enterprises with certain strengths intend to enter the smart home and smart lighting markets, and they can carry out special development through independent research and development. “We have our own dedicated IT department, service background, cloud, and our own system and APP. The advantage of this is that the initiative is more in our own hands, but there are also shortcomings that do not match other systems.” He said. explain. Hou Baiyuan, general manager of Zhongshan Pacific Lighting Co., Ltd., also said that he has independently developed a mobile terminal control APP, which can effectively control his own products in combination with products, but there is still a certain gap with large companies on the sales platform. As for how small LED lighting companies that do not yet have independent development capabilities will enter smart lighting in the future, Kang Xiaoshu, an engineer from Hong Kong Shepherd Lighting Electric Co., Ltd., gave suggestions to focus on fine-tuning the subdivision fields, but ultimately to smart lighting. field is aligned.
The cooperation between Huawei and Opple is just a strong example of the overall LED industry moving towards smart lighting. Except for these large enterprises, LED lighting companies are now developing towards smart lighting. Smart products for small and medium-sized enterprises currently exist. There are certain defects, but it is this led light part of the visionary and courageous enterprises that promote the development and transformation of the entire LED lighting industry to intelligent lighting. I believe that in the future, more enterprises will enter the field of intelligent lighting through various methods and channels.
The Link From:The Development Overview Of Future Lighting
