2014 traditional lighting will usher in the transition point

The channel is king. For any industry, this is a constant reason. The LED lighting industry is no exception.

Needless to say, LED lighting is definitely an alternative source of energy-saving lamps in the future. However, the traditional lighting companies in the transition period are still indecisive in transforming the LED attitude. When dealers find another LED partner, they find that the current LED lighting market products are mixed and the quality of products is uneven.

Due to the lack of a generally recognized brand in the industry, most dealers find it difficult to find a good supplier and it is difficult to find a product with a higher cost performance. When GLII researchers visited the dealers recently, they often heard complaints from everyone: “There are too many LED lighting companies in China, and everyone says that their products are the most cost-effective and have the highest degree of market recognition. Quotations are too confusing, can differ by several times, and the warranty period is the same. How to choose the agency brand that suits you is often at a loss.

For LED lighting companies, the current market status makes them equally puzzled: "In tens of thousands of LED lighting companies, how to develop their own channels, build their own brands, stand out from the crowd."

In the past two years, many LED lighting companies have expressed their desire to establish their own channels. However, since they do not know whether the market timing is ripe and whether they can receive results after the investment, most companies only adopt a wait-and-see attitude.

During the period, there were also a few powerful companies trying. For example, QinShang Optoelectronic Co., Ltd. has started the “100 City Thousand Stores” program since September 2011. Many stores have been set up across the country, but the actual results are minimal. As of the end of the third quarter of 2012, Qinshang Optoelectronic achieved revenue of RMB 593 million in the current period, only a 9% increase year-on-year.

In addition, there is still a gap between LED lighting companies and the real market demand. “What kind of product is the cost-effective, high-acceptance product that the market needs?” Most companies cannot find one or several products as a breakthrough in the market, and therefore do not dare to open up channels easily.

Emerging LED lighting company development channels
For LED lighting companies, if it is said that the improvement of product performance has been the focus of work in the past few years, it is wise to experience the internal strength of enterprises and not establish channels that are not yet mature. However, it is still not time to start preparing for the channel layout. After that two years, the company will be struggling.

GLII believes that after many years of technological precipitation in the LED lighting industry and the government's vigorous promotion in recent years, the market acceptance has been greatly improved. Many end-users choose LED lighting products according to their own wishes, rather than relying on companies, distributors to promote, which is particularly evident in the field of commercial lighting.

GLII expects that LED general lighting will usher in a rapid development period in 2013, and the golden time for channel and brand building will only be 1-2 years in the future. Channel construction and brand building have become urgently needed.

Since the beginning of this year, some companies have already taken actions in channel construction, and in the second half of the year, they are more frequent actions.

On October 12, Delixi set up its first LED lighting flagship store in Yueqing, Zhejiang; Shenzhen Green Semiconductor set up its first LED store in Beijing; National Star LED general lighting product promotion held in Changzhou, the first provincial operation The center was officially established.

On November 20th, the National Star Photoelectric LED General Lighting Product Promotion Conference was held in Zhejiang. The second provincial operation center came into being. On the 22nd, Zhongming Semiconductor successfully signed a national-level agency strategy in Shenzhen. A total of 20 agents were invited to attend the event and signed a contract to become the domestic provincial agency of Zhongming Semiconductor.

TCL Lighting has held a number of LED lighting investment conferences in Beijing, Guangxi, Hunan, Jiangsu, Sichuan, Shaanxi, Shandong, Jiangxi, Heilongjiang, and Anhui since April of this year. Merchants from all over the country have participated enthusiastically and have signed more than 170 businesses. , The contracted amount exceeds 33 million yuan. For LED lighting companies, the establishment of channels is now the situation, the strategic needs, but also the best time.

The smooth establishment of LED lighting business channels naturally requires the cooperation of dealers. At present, the domestic dealers with certain strength are basically the "old honours" of traditional lighting companies. The alternative period of lighting new light sources is also the best time for companies to excavate traditional distribution channels.

First, loyalty of traditional lighting dealers is low. The traditional lighting giants such as NVC, Op, and Foshan Lighting are indecisive in transforming LED attitudes, with little thunder and rain. This indecision makes dealers worry about their own future. A certain NVC lighting dealer once told reporters that if NVC does not step up its business focus on LED business, it will consider acting on other brands of LED lighting products. For traditional lighting companies, the LED lighting business at this stage can only be regarded as "chicken ribs." LED lighting market chaos, price wars intensified, corporate profits quickly decline; the other hand, the traditional lighting, the days of several companies flies gusto. Revenue has increased year by year, and product gross profit margin has also remained at a relatively high level.

Second, traditional lighting companies face their own bottlenecks. LED lighting is a semiconductor product that is very different from traditional lighting. Not only should the problem of light matching be considered, but the challenges of heat dissipation, light decay, dimming, and color matching must also be considered. LED lighting companies have had many years of technological precipitation, compared with traditional lighting, there is a natural advantage in technology.

At the same time, LED lighting companies that currently have a certain amount of capital and technical strength all want to build their own brands and are unwilling to become foundries.

The current economic environment is not good, especially the debt crisis in Europe has a greater negative impact on the global economy. The Chinese real estate market was once in a downturn, and it also had an indirect impact on the lighting industry. Among them, Foshan Lighting's total revenue for the first three quarters of 2012 was 1.59 billion, down 7.8% year-on-year, while revenue for the first three quarters of last year increased by 30% compared to the same period last year; NVC Lighting saw a more significant decline. In the next 1-2 years, even if traditional lighting companies want to transform LED, the speed will be affected.

2014 Traditional Lighting Transition Critical Point
The channel layout needs to invest a lot of money, and will not necessarily see results in the short term. According to GLII statistics, the establishment of 10 brand stores is an example. The cost of the company's investment in one year is about RMB 1.5-200 million. Therefore, for different companies, the construction of channels is different. For companies with stronger financial strength and larger scales:

1. National layout, key breakthroughs. In the country to establish a store or the development of agents around, select key areas as a breakthrough, each break.

2. Increase the brand's publicity, especially the brand promotion of the terminal market. Brands can often play a leading role in the current chaotic market, and are one of the main reasons for the terminal market to select products.

3. Gradually infiltrate into traditional corporate channels. Traditional lighting channel providers have a good customer base. LED lighting companies can enter into strategic partnerships with them, allowing them to sell LED lighting products while promoting traditional lighting.

4. Develop overseas distributors and increase export scale. According to GLII statistics, 80% of China's indoor lighting products will be exported in 2011. Eventually, the battlefield of LED lighting will be in Europe, America and Asia Pacific.

For SMEs:

1. Strengthen and expand a certain subdivided area. Due to limited funds, SMEs have limited product varieties. It is not suitable for a full layout. It should be quickly laid out in the subdivided area. At the same time, timely response to market demand reflects the rapid development of cost-effective products that meet market demand.

2. Strengthen brand promotion and promotion in a small area and build a strong brand position in the region. It is easier to promote brands directly to the terminal market, and there is no need to invest too much, which has an immediate effect.

All in all, LED lighting companies must speed up the distribution of channels, and increase brand promotion efforts while building channels. In the chaotic environment of the market, the brand is the main basis for the choice of the terminal market.

In addition, the traditional lighting companies will always be a strong opponent of LED lighting companies, once the LED market is mature, traditional lighting companies will come on, and when the LED lighting companies to force, it is already too late.

At this point, it is the best time for laying channels. The attitude of traditional lighting companies is not firm, and the traditional energy-saving lamp business is affected by the economic environment, which will certainly slow down the transition speed. GLII expects that traditional lighting companies will increase their transformation efforts after 2014. For emerging LED lighting companies, the prime time for channel and brand building is only 1-2 years in the future.