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LED business how to fight the "price war"

2016-12-15 00:03:02 Source:Shenzhen Hengda Optoelectronics Technology Co.,Ltd.    Author:Admin    Visit:610
Statistics show that 80% of China's LED products rely on exports, by the European and American market downturn and foreign customers continue to lower prices and other factors, the domestic LED enterprise orders and profits fell sharply. Year to date, the mainland enterprises from Europe and the United States LED orders down three percent of the situation has been everywhere. At present, domestic LED terminal application market is not fully open, in the constant attack of domestic and foreign markets, the rapid occupation of the market through low-cost seems to be the most direct and effective means to get rid of the plight.

Industry analysts believe that the current price continued to decline is mainly based on the upstream capacity expansion is too fast, and the downstream application market expansion is not big enough, resulting in upstream and downstream capacity mismatch caused by short-term excess capacity. Whether the international enterprises or domestic enterprises, after a huge investment in early, the market is not as optimistic as expected, especially for the lack of financial strength of SMEs, in order to survive can only choose to use "low" occupy the market.

Last year, the chip price drop of up to 30% to 50%, the industry have lamented the price drop too much, and some people assert that the LED industry in 2012 is likely to be a "price year."

"Price war" a long time, in the LED industry today, many people have different views. Some people think that this is more favorable to the development of enterprises, is bound to allow enterprises to seek technical breakthroughs and improve management capacity and reduce costs. But some people think that the current low-cost LED market competition behavior, mostly through the adjustment of raw materials to achieve the purpose, is still in an unhealthy state of development. As a traditional means of competition in the price war, in the current rapid development of the LED industry, in the end will bring about the impact of LED?

Avoid "bad coin drive good money" abnormal development

January of this year, in the highly competitive price of the Korean region, first-line lighting brand manufacturers to allow the industry to surprise the price of $ 10 to replace the terminal price of 40W incandescent LED bulb, making South Korea to replace the traditional 40W bulb average The price reached $ 10.4, down 13%. Coincidentally, in April, a well-known domestic LED business, high-profile announced in mid-April, the brightness is equivalent to 40W, 60W bulb factory price will not exceed 5 dollars. The news came out, the industry outcry, this enterprise is the industry as the new generation of Korean manufacturers after the "price destroyer."

Turning to the reasons for price cuts, most companies point of view is almost exactly the same, that is, by lowering prices to attract large international giants orders to achieve mass production, seeking further price cuts, and thus quickly pry open the domestic LED lighting market. However, had to pay attention to is that some small businesses, "follow the trend of price cuts", it is inferior products mixed into the market, trying to fish in troubled waters, grab a share.

As the LED industry is not yet a unified national standard, so the uneven quality of the product on the market, thereby causing the price is also very uniform. Many companies to use low-cost raw materials for decompression, and then to low prices to capture the market, not only is not conducive to the healthy development of LED price system, but also to combat consumer confidence in the use of LED products. As Zhejiang Sunshine Lighting Group Co., Ltd., general manager of the official said: "The blind low-cost war will cause the LED market 'bad money to drive out good money' abnormal development."

And must feel the price drop all the important manifestation of the enterprise is a fatal killer. Lv Weidong, general manager of Austrian bright told the "semiconductor lighting" Reporter: "Austrian bright will not fall into the price competition, we have always been this view, only the lack of competitiveness of enterprises will play a price war , In fact, this blind price is not conducive to industrial development and market development.We believe that with the continuous improvement of technology through material cost control and design changes in the structure is the key to reducing costs.Of course, according to international "We will also adjust the price of the chip, but we will not be price-competitive."

Henderson Marketing Director Zuo Huai-min that: "For the price to have a healthy concept, a good company good products must give it a good price, it can continue to provide good products for the community to provide better quality Of the services and products.If the price of the blindly compression, will lead to reduced corporate profits, regardless of staff or business development will be the lack of financial support, not to mention the brand.The future will be shoddy to the road, even if the price is cheap but the quality is Can not guarantee that this is a kind of irresponsible to consumers.

With a rational view of price cuts

Taiwan presided over the "big brother" Wu Zongxian switch to do LED, visible LED industry hot level. As the sunrise industry optimistic about the world, led to various areas of people attracted to the field. Throughout China, the LED industry's pride can be seen from three aspects: the industry's large enterprises, competing to market; for medium-sized enterprises, competing to push new products, expansion of production; for "no technology, No talent, no funds, "the small business, even if the shoes of the enterprise can transform LED business overnight. However, the lofty pride of the enterprise, and can not return to the LED industry, smiling face. 2011, by the European and American economic downturn and the rapid expansion of production capacity and other factors, LED enterprises have "closed down the tide," "attracted numerous heroes Jingzhe Yao."

LED industry is a rational development of the market behavior, its development needs step by step. As one industry admitted: "the development of any industry, can not replace the pride of a moment of pride in the pace." The rapid expansion from the LED industry lessons learned, the "price war" is also applicable.

"We just started to do when the chairman of the energy-saving lamps, the market is also a low-cost, and even some manufacturers do thirty-five dollars.I remember that time, the chairman of the market for the company held the General Assembly, clearly the company's development , With particular emphasis on our company is to do real energy-saving products, the primary task is to ensure product quality, the company must produce every product must have good quality. "A transition to the LED lighting executives in the traditional Say.

Talking about the price war, the executives believe that the "price war" is the same quality level of price competition, rather than "bad money to drive out good money" after the end-user confidence in LED products withered. "The current LED market, the price is not the lowest, only lower, in particular, many domestic enterprises are not mentioning the product performance, it will only fight prices, the impact of low-quality products of the market, this abnormal competition The industry is not good for long-term development, and even hinder the healthy development of the industry. "He said that if the expense of product quality to reduce production costs, can only be short-term behavior, but also cause a vicious cycle, not only high prices, good quality Of the product is the impact of the low price of low-quality products will be no one is interested.

Guangzhou Zhonglong Communication Technology Co., Ltd. Chen Bin, general manager, told reporters that the industry has been exploring when the first year of LED every year hold great hope, but particularly disappointed. In fact, the LED market is growing every year, prices are down every year, this is a normal trend. But the whole industry is too anxious, I hope the price suddenly dropped to very low. In fact, regardless of the expansion of market size or price decline, should follow the basic laws of the market, should have a gradually popular process.

Chen Bin said, LED practitioners must be aware of: First, the market is growing every year, and the growth rate is not small, every year to maintain the speed of more than 30%. Second, the price is reduced every year, most of the rate of more than 10% or even higher, this change is the normal market changes. If the market price suddenly dropped 50% today, this can only mean that the LED industry has been profiteering. Chen Bin also suggested that the price war on three aspects should have a clear understanding. First, the entire industry must first have a clear concept of product and definition. Second, the application side should be clearly aware of the relationship between price and quality are positively related, not pure pursuit of cheap. Third, the industry must be soberly aware of enterprises, enterprises in order to obtain long-term survival and development in the market, and ultimately rely on quality. The success of a particular treatment in a particular project or phase does not mean that it has the capacity for future long-term development.

The face of price cuts should focus on the future

Price war as a means of traditional market competition, is widely used in various industries. Although the malicious acts of price reduction is inevitable, but it is undeniable that the means to reduce prices in promoting enterprises to enhance their competitiveness, control costs also played a positive role. Faced with the inevitable trend of falling prices, enterprises should take a rational view, focus on future long-term development, from technical innovation, management, cost control and other aspects, and actively adapt to the market price trend.

Shandong Huaguang Huaguang Optoelectronics Co., Ltd. Assistant General Manager Liu Qi told reporters that the price decline in any industrial development are the reality must face, LED development is not conducive to the outside. Only the falling prices in order to expand the broader application areas, in order to make LED into the tens of thousands of households. But for the production enterprises, they need to constantly develop new products, reduce manufacturing costs and improve product qualification rate to cope with the pressure of falling prices.

An industry proposal, the price war is an important manifestation of the product grade fuzzy environment is a fatal killer. In 2012, the LED industry is still in the high-risk period, but the capacity is becoming stable, the market capacity to gradually expand, companies should spare no effort in research and development, the next 2 to 3 years LED industry competition will be more reflected in technology, Quality and service.

LED companies in the early huge investment, with the product into the market, cost recovery and the maturity of the production process tends to be stable, LED prices should enter an orderly and healthy downstream channel, a reasonable price range for dynamic adjustment .

"Price decline in a sense, is the result of oversupply, reflecting the LED market capacity problems, but in the long run, will return to a reasonable price.From these aspects, companies in the cost Control, technological innovation, management, etc. to make a breakthrough, to ensure a healthy development space, in order to adapt to market development. "Zhejiang Crystal Day Lighting Technology Co., Ltd. General Manager Cheng Shiyou said.

2012 LED product price trends

Price changes affect the entire LED market, each part of the sensitive nerve. From the upstream chip to the middle and lower reaches of the package and application, the industry are concerned about the future price trend, as soon as possible to adjust the strategy, and actively respond to market changes.

According to the latest price survey report, LED packaging by the Q1 inventory level to Q2 and Q2 single effect, Q2 LED backlighting offer a slow decline trend, down about 3%; by the low-power backlight and lighting sharing LED packages continue to cut prices to grab the impact of the city, Q1 lighting LED package offer fell by about 8%. LED lighting market, 5630 package out of backlighting applications into the lighting, a sudden increase in the amount of making this quarter, low-power lighting package offer drop killer rumbling, the average decline of about 10%.

Chen Bin told reporters, LED chip prices have been showing a downward trend, especially last year markedly increase the price cut, the chip is far from falling to a moderate trend, but the decline in the next few years will be more and more. On the application of products, judging from the chip decline, product prices will continue to decline, there are relatively large decline in space. But the basic price control in the price per watt in 1 dollars or so, the market will become stable.

Liu Qi said that this year's price trend, said the overall application of product price decline in 2012 is an inevitable trend, but as the industry continues to develop, the price decline is to maintain the profitability of the industry on the basis of declining costs, Not just to capture the market price war. The industry is expected this year there will be 15% to 20% decline.

LED lighting products, the price decline is an inevitable trend, but also leveraging the broad civilian market weapon. However, the decline in prices must be in ensuring the quality of products under the premise to achieve. As Zhang Haicong, director general of Shanghai Illuminating Engineering Society, said, "China needs cheap and easy-to-use products."

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