LED channel layout battle is in full swing

Whether it is multinational corporations, traditional lighting companies, LED technology-based enterprises, or export-oriented enterprises, they have begun to establish large-scale channel construction. Various “investment promotion”, “product promotion conferences,” and “large lecture halls” have come one after another. The situation of “beautiful eyes” is overwhelming. As the industry insiders say, the “herd” effect of LED lighting channel construction has emerged, and all companies are in the process of going forward to succeed. However, the concrete effects are not known.

The lighting industry is undergoing tremendous changes. This change not only comes from the technological innovation brought about by LED, but also comes from the changes brought about by competitors, but also from changes in consumer habits in the IT era. Whether it is traditional lighting companies, LED companies, or agents involved in the channel chain, distributors, and design agencies, the business environment for their survival has been completely different from that of the past, and the challenge is imminent.

Lighting channels are changing, are you ready?

Opening up channels becomes the key to driving applications

China has always been the world's largest manufacturer and consumer of lighting products. It has a very strong lighting product manufacturing base and global competitiveness. At the same time, China's lighting market is huge. With the continuous improvement of urbanization, the lighting market has grown rapidly. Due to the above characteristics of China's lighting industry and lighting market, when LED lighting has become the most important application of lighting industry, its application industry and market development has a rare strategic opportunity.

As technology continues to advance and costs continue to decline, LED products are increasingly competitive with traditional lighting products. The two conferences just ended, and the Ministry of Science and Technology held a meeting to discuss which strategic emerging industries could form a large industry in 2020. Semiconductor lighting was listed as one of the two industries that could exceed the scale of trillions, but it was in stark contrast to the huge market space. China’s LED companies are large in number, small in size, lack of leading enterprises in the industry, and no more international brands are known. Business models and marketing systems are still not perfect, channel construction is lagging behind, and the overall cost of products is still higher than traditional lighting products. Public awareness of LED is not high, and new consumer ideas have not been formed yet. It is difficult for enterprises to market. In particular, the new project's production capacity began to be released in the past two years, and there has been a phenomenon of structural excess capacity. Enterprises urgently need to open the market through various channels to achieve healthy development.

In general, there are several reasons for the difficulties in market expansion. One is that LED is a strategic emerging industry, and the technology is continuously improving. The products have not yet been finalized, and new products have emerged one after another. Traditional lighting products have been Mature standards and customers, users choose new LED products are more cautious. Second, compared with traditional lighting products, LED initial purchase prices are still high, although since the second half of 2011, with the gradual release of new production capacity and technology upgrades, there is an oversupply situation in the upper reaches of the LED, the chip prices fell sharply The price of lighting products has also undergone significant adjustments, and the product price/performance ratio has been further reflected, but there is still a long way to go from the acceptance of the civil market. Third, LED lighting has the characteristics of quick product updates and destocking, while the existing lighting market system is far from the demand for LED lighting product circulation. The new market system has not yet formed, which has caused a certain degree of market order. The temporary chaos scene has affected the speed and effectiveness of market promotion.

In particular, with the increase of LED luminous efficiency, technical issues are no longer the biggest obstacles and appeals for LED lighting applications. How to achieve two-way communication in the market, on the one hand, expand the market for replacement products, and on the other hand, open up new application markets based on demand. The new channel system that can effectively promote the development of the LED industry has become the most critical factor in the development of the LED industry and market promotion.

LED's channel complexity

"More dealers, but dealers do not know how to choose; manufacturers are even more; wholesale channels themselves are in the transition phase; e-commerce has become a new choice outside the offline channel ... ..." Zhejiang Sunshine Lighting Appliance Guan Yong, general manager of the Group Co., Ltd., analyzed the changes in the current channel for Semiconductor Lighting:

In the era of traditional lighting, dealers have already formed a judgment on which products of which companies are good, and how difficult it is to select manufacturers. In the LED era, dealers found that all manufacturers stood on the same starting line, dealers did not understand the product, the manufacturers did not form a professional, so the selection process between the two sides is very confusing and very cautious, mutual cooperation in depth is limited , each other's loyalty is in the process of establishing;

There are many new distributors, especially engineering dealers, who are involved. Due to the energy-saving concept of LED, many companies that have not previously done lighting engineering business have strong engineering-related capabilities and began to think that LED lighting is a conceptual project that can participate. , So many of these companies have moved into the field of lighting engineering, many of them in the form of energy service companies;

In addition to the existing lighting companies, channel participants also had a lot of new entrants. They brought a lot of new market ideas. For example, some consider selling electrical lighting products through electrical outlets, just like the more common pattern in Japan. And like the EMC project model, these are the new entrants from other industries brought to the lighting industry channel;

The wholesale channel itself is in the transformation stage. The original wholesale mode from the first-level agent to the second-level agent to the third-level agent has become more flat due to the development of the logistics industry;

Due to the success of many e-commerce company's companies, people's online shopping experience is getting better and better, especially when lighting consumer groups are getting younger, online shopping does not have any technical difficulties. At the same time, lighting products are getting closer and closer to an electronic product, which is easy to understand and grasp. E-commerce has become a new choice outside the offline channel.

The risk tolerance of funds has become an important competitive strategy for manufacturers and distributors. Whether to dare to undertake the distribution of goods and extend the billing risk, whether dare to do EMC projects to bear the risk of collection, different companies have adopted different strategies for this, in the short-term and long-term will have different expression.

"When channels are chaos, companies that already have channels should not be confused and should not change their minds. The 'invariable' mentioned here means not to give up the fundamental things that can create channel competitiveness. Instead of pursuing short-term so-called opportunities and phenomena, it should be more determined to enhance the essential work of channel competitiveness, such as product cost-effectiveness, such as fine management of channels, such as professional service capabilities,” said Guan Yong.

Channel innovation needs to advance together

The development of the LED industry needs new models to promote. In the face of all kinds of channel puzzles, new explorations have started from the industry organization to the enterprise level. For example, the National Semiconductor Lighting Engineering R&D and Industry Alliance (CSA) has started to use various resources to build channels, display and transaction applications. The promotion center and the mainstream companies in the joint industry will jointly create an innovative channel model suitable for the development of China's LED companies, with a view to standardizing the market, maintaining the healthy and sustainable development of the industry, and creating an orderly competitive environment.

Emerging LED companies based on LED also provide them with a new opportunity to rise in the lighting field with a new brand, so they have also invested heavily in building storefronts to build their own channels in order to quickly open the market to build brands; there are some LED companies focused on product production , Put more interests to agents, channel distributors and even OEM commissioners to do the market; there are some options for the middle line, on the one hand compete for some traditional lighting channels for business cooperation, on the other hand, they also own some outlets to cultivate their own channels .

After the traditional lighting companies newly joined the ranks of LED competition, in the face of variable LED prices, the market is not yet mature, the lack of standards can not determine the pros and cons of the product, the risk of rapid product inventory updates are also actively looking for ways to solve the problem, try to establish More close to the user's design channels, the development of network channels, even for channel providers to provide more technical follow-up services to invest more manpower and funds.

With all levels of efforts, we have reason to believe that a new type of channel system suitable for the development of the LED industry will gradually improve and become an accelerator for the introduction of LED into the market. LED lighting will truly usher in the era of market explosion.