Who will win the LED market price war?

With the advent of channels of light sources, whether it is a flat provincial capital directly linked to a larger number of counties or cities, or self-built provincial warehousing stocks pressure, who can quickly seize the market share, who is the ultimate winner. The key point is the scale and cost of the product. Naturally, the price war is unavoidable.

Hard to avoid

"In April this year, compared with January, some conventional products such as bulbs, T8, etc. are gradually reducing their prices by 30% - 40%, so do not say replenishment, even if it is the first batch of purchase we do not dare to follow Manufacturers require sufficient inventory.” Deng Zhizhong, general manager of Changsha Deshun Hardware Co., Ltd., said that this year he still wants to select two excellent LED brand cooperation and perfect product lines for circulation and engineering channels.

Indeed, the reporter reviewed the comparison of past data. In May last year, a listed company's LED T8 tube was still about 50 yuan ex-factory price. In May of this year, it became less than 25 yuan, which is half of the shrinkage. Moreover, there are a number of scale companies following this price. Rear. If the price changes too much, dealers say "no" to inventory, but the price of closer to or even breakdown of traditional light source products undoubtedly accelerates the penetration of terminal consumption.

"To popularize new products is to start with the price first, a good price war for the promotion of the market, distribution channels more popular, LED has gradually become the mainstream product of the distribution channel. Although Chongqing professional market is scattered, but the acceptance of LED is still very Gao.” Cheng Yongsheng, general manager of Chongqing Yongsheng chain, told reporters.

This year, they will gradually extend from traditional lighting products to LED products. They will also expand the LED product category and echelon as much as possible to meet the coming LED outbreak period.

According to the latest survey report of the GLII Institute, the average price of LED fluorescent lamps decreased by 12% in 2013 Q1 compared to 2012 Q4.

The GLII expects that the price reduction of China's LED fluorescent tubes will continue in the second quarter of 2013, but the price reduction will not exceed 10%. GLII statistics show that in the first quarter of 2013, LED bulb prices dropped by an average of 10.9%. It is expected that the price reduction will continue in the second quarter, but the overall decline will not exceed 8%.

For a long time, the prices of chips, power supplies, and heat-dissipating accessories used in finished products of LED light sources have continued to decline, and the material costs of finished products of LED light sources have been reduced to some extent.

"Originally this year, the upper reaches of the production capacity was tight, and supply was in short supply, but most of them were reluctant to raise prices, and in essence they were afraid of big customers switching to other people's arms. This was in fact a disguised price war. Of course, this also created conditions for the further reduction of the prices of finished products and accelerated the penetration of terminals. It is a good thing," said He Wenbin, director of LED marketing at Gaogong.

Scale effect

Many companies that entered the LED distribution channel in the past year will also define this year as the "key year for the brand-setting structure."

The original capacity and cost advantages supported by export and OEM orders will be released this year in domestic channels. Continuously increasing the large-scale effect, further increasing the cost-effectiveness, strengthening the control of distribution prices, and accelerating the occupation of the terminal market are the highlights of this year's large LED companies.

"We will increase the capacity of LED tubes to 4 million by the end of the year, and the bubble production capacity will have to double. After the scale goes up, the price will naturally be lower. The plan is for this year, the bulbs will be ex-factory prices at 1 yuan per watt. The price is maintained at between 1.5 and 2 yuan per watt, and the integrated lamp ex-factory price is within 20 yuan.” In late May, at the “2013 China LED Product Tour Exhibition and Investment Conference” in Kunming, Mr. Lin Jiliang, deputy general manager of Mulinsen Lighting Analysis.

“Because we predict that the overall price of the above-mentioned light source products will fall by 20%-30% this year. This is a big trend. As a popular brand with high cost performance and stable quality, we naturally need to keep up with this trend.” Lin Jiliang said.

Not only packaging and large light source in the planning of the price strategy of circulation products, even the original traditional and LED business license brand companies are also stepping up the layout. “We currently have more than 700 specialty stores and more than 3,000 outlets. Together with the establishment of a strategic development center this year, we will focus on integrating upstream and downstream purchasing resources to prepare for the wholesale and distribution of circulation-type products.” Zhou Shuiming, general manager of marketing at Jiamei Lighting It stated that it will make full use of its own channels to develop its circulation products to enrich its product line, stabilize its quality dealers, and help its channels sink further.

Industry analysts: In fact, some of the large-scale enterprises integrated in the upper, middle, and lower reaches can each extrude a factory price of one yuan per watt in the first half of the year. However, to maintain current market prices can make more profit, and secondly, the distribution of channel outlets is not yet complete, and it is not necessary. Enemy too many become the target of public criticism. This part of the company is seeking the most reasonable price offensive node. According to the reporter's visit summary, “the sales season will be the sales season and the off-season market.” LED-scale companies that are already at a cost advantage are not in a hurry to “announce the annual price bottom line” during the peak season, while in June and July, the industry’s regular off-season It is a good time to adjust strategies and attack the market.

Lost business

A few days ago, the reporter visited 7 new and old lamps and lanterns cities in the Zou district of Changzhou, and counted about 1,650 dealers in Zou district, of which more than 200 professional LED dealers, more than 400 involved in LED products, sales are expected to be close to traditional lighting sales Because the output value of the project share and the circulation of single products is greater than traditional lighting. The era of large penetration of channels has come.

However, the current lighting is still the traditional channel as the main force, although the emerging LED store began to expand. For example, Changsha, Hunan, has more than 5 companies this year, and its penetration rate has increased from the provincial capital to counties and cities. However, 80% of its sales volume still depends on traditional channels. No matter whether it is a veteran or cutting-edge company, it is difficult to open up new distribution channels for distribution in a short period of time.

And many dealers reflect: the price we all drop, but LED products and good brands are still scarce resources, dealers often see the flowers in the fog.

The major players in the channel, such as the traditional brand store, are doing NVC, Op, and Sanxi while choosing small brands to meet market needs. Really determine which agent LED brand, to complete the distribution of distribution products, full-hearted business is still very few.

At the same time, many dealers do not understand the LED companies, especially in the face of sharp price cuts, when choosing a proxy brand, it seems very confused. The low-priced LED lighting products sold by some dealers are mostly assembled. The quality is uneven, there is no independent brand; after-sales service is not guaranteed, and even the agent LED lighting loses confidence.

“The price of traditional lighting products is transparent, and LED is the most attractive product for dealers. But in the end, what is the trend of LED technology, what is the real LED good product, how to promote LED to end consumers and so on, a series of issues need to be more The professional platform is clear for us to understand.” Yu Hairong, general manager of Nanjing MiLimike Lighting Technology, expressed the attitude of a general distributor.

It is understood that Nanjing has a large and small building materials lighting market about 20, lamps and lanterns business 800, a lot of single LED bulb brand, the main well-known brands are BDO Runda, Rectangular, Myles, Star, ground , Enterprise First, Shifu Ford, Sanxiong Aurora, Lake, Lang, Sidon, Philips, Sunshine, etc. At the same time, there are no less than one hundred low-end low-quality LED bulb brands. A variety of brands and products make it difficult to choose.

For dealers with price and brand confusion, the most choice at present is not fixed and LED brand cooperation, even if the big brands in the LED industry are still cautious. Just do some SMEs and products, because dealers think that now all aspects of LED circulation products are still not very mature, small businesses may be flexible and according to some market characteristics to develop targeted products.

"Lost and wait, it is also possible to miss the best opportunity to cooperate with a good brand." Yang Zhongchen, the general manager of Guanhua Lighting's Shandong Operation Center, who has been engaged in lighting sales for 12 years, told Senior Engineering LED reporter.

Relatively speaking, there are still more dealers actively seeking brand outlets. “However, in March, I took 15 days to walk through two LED industry bases in Shenzhen, Guangdong and Zhongshan. We did not find more than 20 companies and did not find a suitable LED partner. But I will continue because I will not wait for me. "Yang Zhongchen said.