[Text/Zhao Hui] At the dealer conference held in Wuxi in 2013, the general manager of the company, Qiao Wei, expressed his determination: “When we are in the mountains, we can still laugh in the bushes.†Hope and distribution The businessmen worked together to laugh at the end.
The reality is far less optimistic than imagined. The examples of OEM manufacturing brand transformation are everywhere, but the winners are stunned. Technology, brand, and channel are not a day's work. The transformation is a little careless. Not only is the new business difficult to say, but also May be based on the original basis.
"With the increasing demand for LED lighting, many of the original non-lighting companies have entered the border for various reasons. This kind of business choice is undoubted." Some insiders believe that the lighting industry itself has many enterprises, and the industry is also uneven. In the continuous reshuffle, it is not known to what extent these newly-entered companies can gain a foothold and gain a certain market share.
Shiyida transformed its own brand and entered LED lighting in 2009. At that time, the European and American economies were sluggish, and the profitability of the EMS business continued to decline. The company began to consider strategic transformation in 2009 and determined the strategy of transforming the EMS single business to the “EMS business + independent brand†dual industry. The goal is to make LED lighting one of the key development directions for the company's future business diversification. At present, the main products of Shida have covered consumer electronics, traditional lighting products, LED lighting, communication products, high-definition multimedia audio and video products.
In 2011, Shiyida acquired a 20% stake in Shenzhen Huida Optoelectronics at a price of 7.2 million yuan, and subscribed for its newly added registered capital of 3.4 million yuan at 15.3 million yuan. After the acquisition and capital increase, Shida holds 43.86% of its equity and becomes its controlling shareholder, and has substantial control over it and incorporates it into the consolidated statement.
However, from the scope of the consolidated statement on June 30, 2011, Huida Optoelectronics only realized a business receipt of RMB 2,317,700 and a loss of RMB 191,200.
According to the report, the revenue of LED business in 2012 was 37.586 million yuan. Although the revenue scale increased by 233.44% compared with the previous year, the gross profit margin was only 19.62%, which was lower than the average gross profit level of the industry.
"20% of the gross profit, if the cost is properly controlled, may still have a slight net profit, otherwise the loss is normal." Some people in the LED industry commented.
When the annual Huida Optoelectronics also lost a loss of 2.5272 million yuan.
The profitable LED business is progressing slowly, and the profitability is due to the painful period of the transformation of its foundry enterprises. The lack of comprehensive support for brands, channels and technology products is an important reason.
In order to focus on the development of LED lighting, in 2012, Yida launched a non-public offering of shares, raising a total of about 400 million funds. The fundraising projects include Wuxi LED indoor commercial lighting production and construction projects, Wuxi LED lighting R & D center construction project, Wuxi LED lighting marketing The network system construction project and the technical transformation project of the Shenzhen mobile phone control panel production line were officially approved by the China Securities Regulatory Commission in February 2013.
“The company will use medium and high-end indoor commercial lighting as a breakthrough in the LED business. While expanding and strengthening the indoor commercial lighting business, the company will not rule out increasing overseas sales through mergers and acquisitions, and enter the outdoor lighting market.†In his institutional research, Chaucer said that in the LED commercial lighting field, the focus is on hotel lighting and Shangchao chain lighting.
Qiao Wei believes that Wuxi Shiyida has accumulated rich experience in lighting product planning, supply chain management, project management, quality system management, manufacturing system management, etc. in the process of providing Philips EMS services for lighting products for a long time. Business extension has a certain first-mover advantage.
At the same time, due to the low penetration rate of LED lighting, the profit level of traditional lighting business is relatively stable, and the time and intensity of traditional lighting enterprises investing in LED business is not enough; Wuxi Shiyida has invested a lot of manpower and material resources in LED lighting business. Therefore, Shida believes that it has more advantages.
In fact, since the beginning of 2013, a large number of traditional lighting giants Sunshine Lighting, Sanxiong, NVC, Op, etc. have accelerated the pace of transformation to LED, and have invested heavily in the development of LED lighting products to accelerate the distribution of goods in their own channels.
Taking sunlight lighting as an example, its proportion of LED lighting in the overall business in 2013 has risen to about 30%.
"The most important question for LED lighting is still where your customers are?" said Guan Yong, general manager of Sunshine Lighting. The top ten LED brands in the future will be traditional lighting companies, which are determined by the market and customers. As long as the traditional lighting company wakes up, it will take a lot of effort, and the branded enterprises will still occupy more market share.
The brand and channel are precisely the weakest places in the company.
As a foundry, the company has the advantage of manufacturing capacity. However, since it does not directly face the end customers, the understanding of market demand is far less than that of brand enterprises, and the channel is impossible to talk about.
Although the company has established a domestic marketing department, an overseas marketing department and a large customer marketing department, the corresponding marketing departments are connected to different types of customers. But the development of the customer still takes time.
Qiao Wei said that Wuxi Shiyida plans to gradually establish an LED lighting marketing network system, a regional logistics distribution center and an informatization management system in the next two years to further enhance the brand awareness of the company.
However, the current situation, the competition for channels has entered a fever, and the quality channels have been basically divided. If you want to enter it again, the time and resources will be multiplied several times.
“The more the channels have found their own shortcomings, Mu Linsen started the domestic channel in April 2012. We have done a lot of research, analysis and research on the domestic channel model, and then think about how to do it better.†Mulinsen Lighting Manager Lin Jiliang said that last year we invested a little bigger in the channel, but the more we invested, the harder it was to find. The domestic form is the hardware building materials market, hardware store, lighting market, which is the main sales entrance, more hidden channels, the form is too complicated, it is difficult to specifically say who it is, what to do.
“In 2015, the channel construction and layout will be basically completed. This year, we can see that some enterprises have stopped their own channel development. Many companies realize that doing channels as a brand, you may need a lot of capital investment, the risk of input and output. Very large." Dr. Zhang Xiaofei, CEO of Gaogong LED, commented on the channel.
The pace of construction of the beneficial channel has been significantly slower. The hotels and the supermarkets that are the focus of the company have higher requirements for the brand.
"We generally choose international brands or domestic traditional well-known brands such as Op, Sanxiong, etc." The engineering manager of a four-star hotel told the "High-tech LED" reporter. Dr. Zhang Xiaofei believes that in 2016, the differentiation of LED lighting market will become more and more obvious. Brands in the era of LED lighting will slowly emerge. 2017 is a year of decisive victory, who is the leader at this point in time, basically has a positioning.
The goal of the company is to hit the domestic first-line lighting brand in 2018.
The reality is far less optimistic than imagined. The examples of OEM manufacturing brand transformation are everywhere, but the winners are stunned. Technology, brand, and channel are not a day's work. The transformation is a little careless. Not only is the new business difficult to say, but also May be based on the original basis.
"With the increasing demand for LED lighting, many of the original non-lighting companies have entered the border for various reasons. This kind of business choice is undoubted." Some insiders believe that the lighting industry itself has many enterprises, and the industry is also uneven. In the continuous reshuffle, it is not known to what extent these newly-entered companies can gain a foothold and gain a certain market share.
Shiyida transformed its own brand and entered LED lighting in 2009. At that time, the European and American economies were sluggish, and the profitability of the EMS business continued to decline. The company began to consider strategic transformation in 2009 and determined the strategy of transforming the EMS single business to the “EMS business + independent brand†dual industry. The goal is to make LED lighting one of the key development directions for the company's future business diversification. At present, the main products of Shida have covered consumer electronics, traditional lighting products, LED lighting, communication products, high-definition multimedia audio and video products.
In 2011, Shiyida acquired a 20% stake in Shenzhen Huida Optoelectronics at a price of 7.2 million yuan, and subscribed for its newly added registered capital of 3.4 million yuan at 15.3 million yuan. After the acquisition and capital increase, Shida holds 43.86% of its equity and becomes its controlling shareholder, and has substantial control over it and incorporates it into the consolidated statement.
However, from the scope of the consolidated statement on June 30, 2011, Huida Optoelectronics only realized a business receipt of RMB 2,317,700 and a loss of RMB 191,200.
According to the report, the revenue of LED business in 2012 was 37.586 million yuan. Although the revenue scale increased by 233.44% compared with the previous year, the gross profit margin was only 19.62%, which was lower than the average gross profit level of the industry.
"20% of the gross profit, if the cost is properly controlled, may still have a slight net profit, otherwise the loss is normal." Some people in the LED industry commented.
When the annual Huida Optoelectronics also lost a loss of 2.5272 million yuan.
The profitable LED business is progressing slowly, and the profitability is due to the painful period of the transformation of its foundry enterprises. The lack of comprehensive support for brands, channels and technology products is an important reason.
In order to focus on the development of LED lighting, in 2012, Yida launched a non-public offering of shares, raising a total of about 400 million funds. The fundraising projects include Wuxi LED indoor commercial lighting production and construction projects, Wuxi LED lighting R & D center construction project, Wuxi LED lighting marketing The network system construction project and the technical transformation project of the Shenzhen mobile phone control panel production line were officially approved by the China Securities Regulatory Commission in February 2013.
“The company will use medium and high-end indoor commercial lighting as a breakthrough in the LED business. While expanding and strengthening the indoor commercial lighting business, the company will not rule out increasing overseas sales through mergers and acquisitions, and enter the outdoor lighting market.†In his institutional research, Chaucer said that in the LED commercial lighting field, the focus is on hotel lighting and Shangchao chain lighting.
Qiao Wei believes that Wuxi Shiyida has accumulated rich experience in lighting product planning, supply chain management, project management, quality system management, manufacturing system management, etc. in the process of providing Philips EMS services for lighting products for a long time. Business extension has a certain first-mover advantage.
At the same time, due to the low penetration rate of LED lighting, the profit level of traditional lighting business is relatively stable, and the time and intensity of traditional lighting enterprises investing in LED business is not enough; Wuxi Shiyida has invested a lot of manpower and material resources in LED lighting business. Therefore, Shida believes that it has more advantages.
In fact, since the beginning of 2013, a large number of traditional lighting giants Sunshine Lighting, Sanxiong, NVC, Op, etc. have accelerated the pace of transformation to LED, and have invested heavily in the development of LED lighting products to accelerate the distribution of goods in their own channels.
Taking sunlight lighting as an example, its proportion of LED lighting in the overall business in 2013 has risen to about 30%.
"The most important question for LED lighting is still where your customers are?" said Guan Yong, general manager of Sunshine Lighting. The top ten LED brands in the future will be traditional lighting companies, which are determined by the market and customers. As long as the traditional lighting company wakes up, it will take a lot of effort, and the branded enterprises will still occupy more market share.
The brand and channel are precisely the weakest places in the company.
As a foundry, the company has the advantage of manufacturing capacity. However, since it does not directly face the end customers, the understanding of market demand is far less than that of brand enterprises, and the channel is impossible to talk about.
Although the company has established a domestic marketing department, an overseas marketing department and a large customer marketing department, the corresponding marketing departments are connected to different types of customers. But the development of the customer still takes time.
Qiao Wei said that Wuxi Shiyida plans to gradually establish an LED lighting marketing network system, a regional logistics distribution center and an informatization management system in the next two years to further enhance the brand awareness of the company.
However, the current situation, the competition for channels has entered a fever, and the quality channels have been basically divided. If you want to enter it again, the time and resources will be multiplied several times.
“The more the channels have found their own shortcomings, Mu Linsen started the domestic channel in April 2012. We have done a lot of research, analysis and research on the domestic channel model, and then think about how to do it better.†Mulinsen Lighting Manager Lin Jiliang said that last year we invested a little bigger in the channel, but the more we invested, the harder it was to find. The domestic form is the hardware building materials market, hardware store, lighting market, which is the main sales entrance, more hidden channels, the form is too complicated, it is difficult to specifically say who it is, what to do.
“In 2015, the channel construction and layout will be basically completed. This year, we can see that some enterprises have stopped their own channel development. Many companies realize that doing channels as a brand, you may need a lot of capital investment, the risk of input and output. Very large." Dr. Zhang Xiaofei, CEO of Gaogong LED, commented on the channel.
The pace of construction of the beneficial channel has been significantly slower. The hotels and the supermarkets that are the focus of the company have higher requirements for the brand.
"We generally choose international brands or domestic traditional well-known brands such as Op, Sanxiong, etc." The engineering manager of a four-star hotel told the "High-tech LED" reporter. Dr. Zhang Xiaofei believes that in 2016, the differentiation of LED lighting market will become more and more obvious. Brands in the era of LED lighting will slowly emerge. 2017 is a year of decisive victory, who is the leader at this point in time, basically has a positioning.
The goal of the company is to hit the domestic first-line lighting brand in 2018.
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