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With the massive outbreak of the LED industry, the time to enter the civilian market is getting closer. At this time, quickly grabbing the market is a key step in the development of LED companies.
Since last year, well-known LED manufacturers such as Mulinsen and Changfang Lighting have taken the lead in price wars. Low-cost bulbs occupy the market share of the terminal, and establish a brand in the hearts of consumers, thus entering the public's field of vision. Since the beginning of this year, the trend of price war has intensified, and many international and domestic leading enterprises have launched low-priced products and participated in price competition. However, in addition to these strong companies, most of the more than 10,000 companies in the LED industry are small and medium-sized enterprises. In the critical period of LED lighting development, it should not participate in the price war, how to participate in the price war, has become a difficult problem in front of the enterprise. LED price war, is it a bubble or a feast?
The key to the transition: the market chaos to promote the price war price war is the result of more competitors and product homogenization. Any hot emerging industry is inevitably going through this phase. The investment in the LED industry is overheated, and the market is oversupply, which has spawned the emergence of price wars. When everyone's products are similar and there are many competitors, the price war will be inevitable, especially now that the application market size is not large enough to accommodate so much capacity. Some enterprises use price wars because of inventory backlogs. Some enterprises take the initiative to adopt price reduction strategies in order to seize market share, quickly establish brand recognition, and win development opportunities. As the market expands, the price war will improve, but this process will last for a long time.
In 2013, overseas demand for LED lighting increased significantly, and the market was hot. Many domestic favorable policies and government orders have also driven the development of the LED industry to some extent. Driven by many favorable policies, companies have seen the dawn of the mature LED market. In order to seize the LED lighting terminal market, the price war began. Internationally, after Samsung released a $15 60-watt replacement LED bulb and cree launched a $10 40-watt replacement LED bulb, Osram announced that it will launch LED bulbs of less than 10 euros in the European market in June. In the domestic market, a few days ago, Qinshang Optoelectronics released hundreds of the latest LED lamps, of which 5W bulbs cost as low as 12 yuan, and 18W T8 lamps cost 33 yuan. As a domestic LED lighting application leader, Qinshang's product quality and R&D capabilities have advantages in the industry. The low-priced products launched this time have strong competitiveness in the market and set off a huge storm in the industry. It can be foreseen that the LED market price war has entered a white-hot stage.
The era of competition: LED price war is a double-edged sword compared to other lighting products such as energy-saving lamps. Although LED lamps have many incomparable advantages, the biggest disadvantage is that the price is too high, leading to widespread bottlenecks and the broadest prospects. The popularity of the civilian LED lighting market has been slow to heat up. According to GSCresearch statistics, with the development of LED technology and fierce market competition, LED products have only been released in the market for two years, and the price has more than doubled. The price of cold white LED is still high in the price of 80 yuan in 2011. By 2013, many manufacturers have exploded the price of 3040 yuan, which is a big price dip. The price of warm white LEDs dropped from 120 yuan to 4050 yuan. According to this development speed, it is expected that by 2015, the price of LED products will eventually fall below the 20 yuan mark. I believe that when the vast civil market door will open automatically, LED will be boldly on the stage of history, officially entering the homes of ordinary people.
From the market point of view, the price war of LED lighting products has warmed up the LED market. The various publicity products can also make consumers more familiar with and expect LED products, and promote LED products to get out of the cold situation of the industry hot market. From this perspective, the price war still has a positive effect on promoting the LED industry.
However, in response to the current chaotic situation in the market, rushing to launch a price war is also likely to lead to vicious competition in the industry.
For the enterprise itself, further, it can quickly seize the market share in the critical period of industrial development by actively lowering the price, establish the brand image of the product in the consumer's mind with the cost performance, and produce the first effect in the upcoming LED market. People take the lead in one step. Taking a step back, due to the emergence of the industry, most LED companies are small and medium-sized enterprises. In addition, the current LED products are still subject to high technical constraints, and their market prices are still quite far from consumer psychological expectations. Participating in price wars means taking the initiative. Reduce profits, even unprofitable. Once the industrial chain of the enterprise is out of balance, it may be hit hard, and perhaps it may not be able to recover from the historical stage. Therefore, the price war is still a double-edged sword.
Long-term policy: preferential price plus excellent quality, double guarantee is the key price of the LED lighting products to win the industry's development, but this does not mean that price war is a panacea for enterprises to deal with market competition. Manufacturers produce LED products without preferential prices and excellent quality as a double guarantee, it is difficult to survive in the fierce industry competition for a long time. It is a foolish way to reduce costs by simply reducing profit margins. It is also impossible to maintain long-term. An industry insider said.
The most important point for enterprises to deal with price wars is to find a correct position and improve the quality of their products. The low-price strategy is a test for the company's technology and capital. If a company without strength rushes to participate in the price war, it may be counterproductive, and the wife will lose the soldier. Therefore, LED enterprises should first strengthen their research and development capabilities, improve production technology, improve production efficiency to reduce costs and obtain profits, and should increase the technical content and increase the added value of products in order to stand firm in the fierce competition.
With the development of technology, MOCVD has gradually achieved localization and chip manufacturing technology has been continuously improved. It is foreseeable that in 2013, the cost of LED midstream products will continue to decline to cope with market demand. The final price of LED products will drop to a reasonable level, so that enterprises and consumers can achieve a win-win situation.
LED price wars have made LED prices more affordable to people. This is undoubtedly good news for expanding the LED industry market space and consumer perspective. But in this battle, many LED companies are destined to undergo a cruel test and stifle in order to win in the melee, laughing to the end. During this period, if you are not careful, you may lose your forefoot and become a small fish in the LED big fish mouth. Enterprises can only retreat if they think carefully and find a strategy.