According to a report from Korean media MoneyToday, recently the LED lighting industry and the Korean Photonics Industry Promotion Association (KAPID) reported that the Korean LED lighting market certified in 2015 was about 1 trillion won (approximately US$850 million). Over the years, the LED lighting market has maintained a growth rate of 10-15%, but now it is due to oversupply, and it has hit a low-price bloody battle.
At the beginning of 2015, the Korean Commission for Corporate Partnership excluded the LED lighting industry, which is suitable for small and medium-sized enterprises, in order to encourage large companies to invest in non-governmental LED lighting markets other than government procurement projects. Joint competition to stimulate the growth of the LED market.
However, the situation was unexpected. What emerged in the market was not the competition between South Korean SMEs but the low-priced products in China that gradually swept the market.
According to data from the Korea Optical Industry Promotion Association, LED lighting was still suitable for SMEs in 2013. The private market is about 500 billion won, of which 99% is estimated to be produced in China.
According to industry figures, in the government procurement market of 300 billion won, LED was still limited to the competitive area of ??small and medium-sized enterprises, and it can maintain 100% production in South Korea. However, in the private market, whether it is B2B or B2C, almost all of China’s LED products are in the world.
Recently, a report published by the Korea Consumer Protection Institute (KCA) also pointed out that according to sales volume and visibility, 17 out of the 19 LED lighting products in Korea are produced in China by OEM and ODM.
According to the analysis, although LED has been lifted from the suitable industry, South Korean companies are still eager to import low-priced land-based products, mainly because there is no confidence in the LED market. LED lighting industry sources said that large companies are competing to import low-priced Chinese products, mainly to make up for the loss of the LED lighting business unit before, to increase profitability.
However, with the growing threat of low prices in China, the phenomenon at this time is that more and more SMEs have abandoned self-development of LED modules. People in the industry believe that South Korean SMEs have not yet reached the mass production stage after self-developed model organizations. The decree specifying suitable industry species was lifted, leaving SMEs facing the need to compete with large companies for the low price of Chinese products imported, leading to SMEs’ ??competition. The industry has given up on the development of original technologies. It is unclear whether the Korean government’s LED lighting policy will change in the future.