作者：Blade

International brands tend to enter the LED blue ocean market (2)

From the instruction of Mr. Fang, we can deeply feel that LED lights has developed into its final stage both in technology and in strategy. LED industry is a hot issue. Companies large and small intend to share this attractive cake and flooded into this market one after another. However, this sort of chaos did not disrupt the rhythm of giant enterprises. They definitely will enter the LED blue ocean market one day, but not now. They need to firstly measure their economic and technologic strength, choose a right developing direction, focus on LED lighting business and devote themselves to promote their products.

 From the instruction of Mr. Fang, we can deeply feel that LED has developed into its final stage both in technology and in strategy.

Giant companies must take a lot of actions in studying the market and preparing marketing strategy. Brand image is rather important for them. As we all know, attending Fair is an effective method to promote products. But these Fairs have various qualities. Some of them are really bad-performed, lacking of professional guidance, disordered management, even low-quality of customers. Giant enterprises will select Fairs to attend. The purpose of the enterprises to participate in such activities can be divided into multiple levels, including information transmission, brand promoting, new product introduction, and of course trading. Some effect can be achieved during these events, while others need a long-term accumulation. Sales played a rather important role in these activities. “They should have some professional knowledge if they from technological area. Some companies would ask their sales to learn something about their products (technologically). But we never did that. We only select sales from people whose major is related to our products and technique. Toshiba is a brand not an enterprise, its meaning is far more important than the enterprise. As a LED lighting company, we need to maintain a trusted and reliable brand image” Said Mr. Fang.

 

At present, government effort to LED lighting applications is reinforced continuously. Director of the Commission of China’s Environmental and Resources said the government will arrange about 8 billion yuan to purchase 4 million high-quality LED Street Lights during the “12th Five-Year”. In this regard, experts indicated that although this purchase plan is not “big”, but the government expressed their supportive attitude to LED industry. Currently, no one will deny the fact that China will be a LED blue ocean market in near future.


International brands tend to enter the LED blue ocean market (1)

“Blue Ocean Strategy is a business strategy book first published in 2005 and written by W. Chan Kim and Renée Mauborgne. What the authors believe is the high growth and profits an organization can generate by creating new demand in an uncontested market space, or a “Blue Ocean”, rather than by competing head-to-head with other led lights suppliers for known customers in an existing industry.” (Copied from Wikipedia)

“Blue Ocean Strategy is a business strategy book first published in 2005 and written by W. Chan Kim and Renée Mauborgne.

According to the relevant industry statistics, semi-conduction lighting will be one of the most promising industries in 21 century. The development of LED technology created the third revolution in lighting history, behind which is the huge profit potential. Over the past decade, the average annual growth rate is over 20% in global LED street lights market. High-brightness LED lighting market was growing fast. The average growth rate is around 46% from 1995 to 2005. It may probably be able to keep 40%-60% market share in next 5 years. The huge market demand spurred the development of the production. Even enterprise for other industry has diverted their attention and resources into this area, including some world’s 500 giant enterprises. They name it as LED blue ocean market.

 

In the interviewe, Mr. Xiao Fang, Vice Minister of Toshiba Lighting Planning sector, revealed that Toshiba have involved in both traditional fluorescent lighting market and LED lighting market presently. However, LED high bay lights will no doubt the top priority and primary objective in their agendas in consideration of sustainable long-term development. As a veteran in the electronic information industry, Toshiba intend to be a leader in the rapid development change rather than a participant. Toshiba products cover a broad range of area: radar, transistor televisions, microwave ovens, computers and other e-business products. Toshiba had a lot of confidence in entering the LED blue ocean market by virtue of their mature semiconductor technology, advanced driver design and valuable marketing experience gained from the traditional lighting business. Mr. Fang also said that brand effect brought both merits and demerits to Toshiba. No doubt, the tremendous force of the brand influence will give them an easy way to exploit the market. However, they will also be restricted in market positioning and promoting.


ASEAN – new LED strategic stronghold

Because of the European debt crisis, many European countries are striving to cut government spending, balance the budget, leading to a dramatic shrink of lighting-related government procurement and municipal construction projects. After the economic crises in 2008, Chinese led lights market and South East Asian market are two first recovered markets all over the world. Infrastructure will largely promote the development of their lighting market, including LED market. In 2012, WTO predicted that China will be new LED strategic stronghold.

Because of the European debt crisis, many European countries are striving to cut government spending, balance the budget, leading to a dramatic shrink of lighting-related government procurement and municipal construction projects.

With the economy development, China and South East Asia speeded up the urbanization process. LED lighting no doubt played an important role during this process. Indoor lighting, outdoor lighting, lighting for industrial purpose, lighting for commercial purpose, etc. There will be an sharply increase in LED lighting products demand.

 

ASEAN is now the world’s third largest regional organization after North America and the European Union, with a population of 576 million. The GDP has reached 1.5 trillion U.S. dollars in 2011. The China-ASEAN Free Trade Policy also made them as another LED strategic stronghold. China is the world largest production base of LED products, having formed a whole industrial chain in upstream, midstream and downstream. Industrial advantages are quite obvious. Meanwhile the mainland market also has great potential for development. However, in every part of the entire industry chain, there are a lot of competitions. Small and medium sized companies were hard to survive. With the implement of China-ASEAN Free Trade Policy, China’s giant LED suppliers turned their attention on this virgin land. “ASEAN market is an waiting-to-be-developed market. It is a virgin land to domestic LED manufacturers. LED lighting market was no longer an emerging market. Intense competitions made them more like to choose overseas market.” Said one of the government officials.

 

According to the new reports released by the Vietnamese Ministry of Construction, the national urbanization level Vietnam will reach up to 35% in 2015. The expected investment is 23 billion dollars from 2011 to 2015 and 27 billion dollars from 2016 to 2020. Thus, LED lighting will enjoy a huge expansion potential in the ASEAN market. There is no doubt that ASEAN will be the new LED strategic stronghold for China’s LED enterprises. This is a wise strategic layout of them in the global economic crisis.


The second chapter: LED lighting industry marketing innovation “four gold strategy”

Construction of the new cooperation between the LED Lights manufacturers

Whether it is home appliance industry or the lighting industry, almost all the problems of conflict by manufacturers. In the lighting industry, for example, this year, the biggest events is the NVC and its Zhejiang Operations Center China policy linkage disputes. NVC set up the undo operation center in Zhejiang, and the brand in other led lighting industry enterprises also exist in some part. Then, the lighting industry for cooperation between the manufacturers raise new questions, it is immutable or frozen, or destroy the old and establish the new? Although the lighting industry does not have any action in the channel model right now, yet for the futher, both sides can not think over.

The second chapter: LED lighting industry marketing innovation "four gold strategy"

Midea in the promotion of microwave oven, put forward to establish extensive Associated Companies act.Midea microwave oven promote the channel change which is the original “administrative standard” management for the improvement of “market oriented” management. Midea attention the market share of the net profit before, dealers are concerned about the net profits. It is often produce two appeals conflict. Associate Companies is established, the offices and distributors are tighly engaged. The Associated Companies and distributor signed a contract with is 5 years, what is equivalent to give dealers 5 years contract period, so he dared to plan, and to invest.  While the Midea’s opponent Galanz is widely established “joint venture subsidiary, the traditional marketing center and office management, model completely quit, and all sales subsidiary”, the traditional led lighting industry marketing center and office management model completely quit, all sales subsidiaries have independent legal personality, which is also means that each company has on the local market management decision-making, manage independently, and responsible for their own profits and losses. “Previously, manufacturer is among the sale, short-lived business, now, the sales has not adapted to the demand of new situation. Our future cooperation mode is the manufacturer to establish a sustainable profit, sustainable business model and business relations.” Du Jiangjun said, “the channel change is an inevitable  competition. Reform should enhance the competitiveness of the premise. Safe and controllable, energetic, healthy and sustainable, is the channel change.

The first chapter: led lighting industry marketing innovation “four gold strategy”

Survival and development of lighting industry and led lights industry must continuously reform and innovation. Not only is the technology innovation, marketing innovation can not be a lot of marketing reform which will tend to be more economic benefits. From the first shopkeeper to dealers, on behalf of the processing to the brand, the lighting industry has matured. Whether how the company works, in particular, specifically how to do marketing. This is a problem worthy of our business thinking of led lighting industry.

The first chapter: led lighting industry marketing innovation "four gold strategy"

LED Lamps City as a mainstream channel should be adept at mass marketing

In lighting field, lighting city is the mainstream channels. Most of products are sold by Lamps City. With the increasing of the lamp city, the other channels are intensified competition Lamps city is also faced with the issue of marketing innovation. At the Forum, introduced by the representative of the Hong Kong Harbour City marketing practices. Hong Kong, Harbour City, Hong Kong’s largest shopping center, in the growing competition of the market, the successful use of the product mixed strategy, operations strategy and promotional communication strategy, consolidate and improve market position. These three strategies, simply select marketable goods as much as possible, to improve the management of shopping centers and services. Strengthen external advertising.

led lighting industry is the consumer goods of all residents, but also for art and technology. Consumer packaged goods around Lamps City should seize these factors and to good use and play, like Hong Kong, Harbour City, as the form of promotion LED lighting products sales , to achieve win- win situation. Some other advanced Lamp City have shown. Colliers Beijing, Chengdu Golden Palace and in the choice of approach lighting brand, variety and quality are increasingly “picky”, to ensure goods in order to meet consumer’s demands, and adapt to the trend of consumption. Chongqing Oriental Plaza lighting, strengthen market management and improve service levels. Zhengzhou Jintai into holding model contest and led lighting industry culture festival, the Shilai River in Beijing City Lighting held the “spring breeze” public  welfare activities, and so on, these practices have successfully expanded the lamps city public influence, and promoted the sale of lamps. Of course, integrated shopping center have many successful experience which is worth of Lamp city to learn from.

Micro grid energy was applied in rural areas of India, low-power LED lighting became a light spot (2)

It its first LED Lights development stage, Mera Gao Power only had eight villages joint the plan. The first commercial Solar-LED micro grid was set up during the summer last year. In Shaad’s words, the initial situation was rather difficult. “Most people actually in a wait-and-see mode, they have not even used many electrical appliances before this. How could we make them completely trust the system?” Even for those villages open-minded enough to accept this new technology, Shaad and his friends had to spend a lot of time to teach them some basic knowledge of solar system and low-power LED lighting applications. Made sure that most of them know how to operate and maintain them properly LED Panel. Although it was not an easy job, Shaad did find happiness in it. It is a step forward of his country.

 Micro grid energy was applied in rural areas of India, low-power LED lighting became a light spot (2)

Last month, Mera Gao Power put forward another plan, in which more than 40 villages are going to be installed this kind of Solar-LED micro grid before next year. After a negotiation with U.S. Agency for International Development, they received a totally $ 30,000 grant. Mera Gao Power also expressed their wishes to help other companies to enter this industry, sharing their experience on these issues. According to World Resources Institute, the Solar-LED micro grid will have an average annual output value around 2 billion dollars in India. It will become a large LED Tube market.

 

A small sized Solar-LED micro grid system only cost $ 2500, can provide electricity for more than 100 households. The entire system will be divided into 15 groups, controlled by two power generating center. Every group was allocated a solar panel and a battery, using 24VDC. In this system, copper wires were replaced by aluminum wires, saving a large amount of cost. Before installation, Shaad would send out professional engineers to survey and draw the map of the village, ensuring the most effective arrangements for the distribution lines.

In villages where Solar-LED micro grid has been installed, each house can enjoy a 7-hour power supply, with an average current of 0.2A. This is enough for 2 indoor low-power LED lighting applications. Besides, they can have one more plug for cell phone charge. The estimated cost for every month is about $ 2.


Micro grid energy was applied in rural areas of India, low-power LED lighting became a light spot (1)

India has a population around 400 million, which is the second-most numerous nation in the world after China. However, the majority their people are living in rural areas. Due to the underdevelopment of grid system, a large number of villages are still living and working without electricity and LED Lights. For most of them, life is tough. They even need to take long-distance journeys to charge their cell phones. Their dim houses still use kerosene lamps.

 Micro grid energy was applied in rural areas of India, low-power LED lighting became a light spot (1)

In order to change the situation, Brian Shaad and his friends set up a new LED Products company named Mera Gao Power, using low-cost solar panels and low-power LED lighting applications to build a micro grid. This Solar-LED micro grid can provide simple and clear indoor lighting for every inhabitants and also period outdoor lighting for public places. Most of LED lamps used in this system were imported from China. “We did considered to import these lamps from German or America. They provide good products with good qualities, but the cost is too much. We have very limited budget, could not afford them currently. All these lamps are from China, they are pretty good, with reasonable prices, we appreciate that.” Said Brian Shaad. Once being promoted, Solar-LED micro grid received a very positive respond and has been applied in another three neighboring villages. This micro grid is more suitable for small regions, occupying relatively small space for power generation. Although there are other alternative solutions, like solar lanterns (provide lighting and charge cell phones), but the cost of Solar-LED micro grid is shared among villagers. This system can be improved by using large scaled system for power generation and storage, which has higher using efficiency. The manager of Mera Gao Power indicated that only low-power LED lighting applications can be used in small scaled micro grid. Large lamps consume too much energy that this small sized grid cannot keep up.

 

“Villagers expressed their appreciates to us, now they have enough light in their houses during nights. We should do it in an earlier time. This system should and will get more attention in near future, we believe that.” Indicated by Brian Shaad in a recent published report about the Solar-LED micro grid.


LED enterprises focus on Olympic

PV photoelectric and sports event, a rather wired combination. These two seemingly irrelevant areas now have been tied up with each other. As the world’s first PV companies sponsor for the World Cup, Yingli Group is in preparation for the World Cup 2014: provide the most expensive photovoltaic power generation system for Maracana Football Stadium in Brazil. It seemed that a quiet consensus has been set up in the photovoltaic field. With the approaching of London Olympic Games, a series of event marketing for the Olympic Games is also heating up.

PV photoelectric and sports event, a rather wired combination. These two seemingly irrelevant areas now have been tied up with each other.

As early as in March this year, Guangdong NVC lighting has signed a partnership agreement with Chinese Olympic Committee of Hong Kong, Chinese Olympic Committee of Macao and Chinese Olympic Committee of Taipei in Chongqing Sheration Hotel, followed by another lighting enterprise CNlighting, who intended to become the official sponsor and strategic partner of the Chinese fencing team and consequently gain the ticket for London Olympics.

 

This is not a first handshake between LED enterprises and the Olympic Games. Lighting projects of Beijing Olympic Games have been competed among several giant LED enterprises. Finally, Philips, NVC, Mitsuo Aurora and Morninghope Lighting won the battle, and shared the 500-million-yuan Olympic lighting project cake. Spending more than 10 million on CBA made Timesos became the most eye-catching LED Lights manufacturer recently. In an earlier negotiation with State Physical Cultural Administration (SPCA), Timesos signed a four-year contract and became the official sponsor for CBA in next four years.

On one hand, with the vigorous launching of fitness programs, the enthusiasm of people for sporting events is growing sharply. This also provided a premise for enterprises in the sports marketing. On other hand, the success of Coca-Cola, Samsung, Anta, Special Steps and Pick also gave a shot in the arm to other domestic LED enterprises. After tasted the sweetness of sports marketing, quite a few photoelectric lighting companies began to test the water.

 

In the industry view, although sporting events can help establish a brand and get through the market, it is actually a rapier. Once failed in operation, LED Street Lights companies would suffered serious harms. Compare with shoes and clothing industry, LED lighting business is in the early stage, with relatively limited funds. Engaging in sporting events is really a big challenge for them.

From the failure of vision photoelectron resolution led display lighting industry

The industry demand slowdown, and the shopping price make led display lighting industry reshuffle. Flowing last year, especially after the collapse of June Tatsutaro of Jun Tatsutaro Boren, recently Shenzhen has a medium-sized led lights display production enterprises–vision optical Electronics Company Limited(hereinafter referred to as the “vision optical electronic”) collapse.

From the failure of vision photoelectron resolution led display lighting industry

Another fallen

According to media reports, may the kind of light electronics in June 29th officially declared bankrupt. The assets of 100 million yuan, a total of more than 400 employees of led display lighting production enterprises of light electronic wave arrears amounted to 20000 yuan, in addition to poor plant decoration party more than 38 works.

The company’s financial manager said, the bankruptcy of the company is to a large extent because of the SME loan difficult problem.They had to get a loan of the Bank of Hangzhou, now they are more afraid of the Bank of Hangzhou to creditors.

A reporter from the Shenzhen credit online to vision, optical electronic legal representative as the Xing Yi, the company address in Shenzhen City, Baoan District Longhua streets Clear Lake Road Guohong industrial zone.

Many industry insiders told us that the Xing Yi, Sichuan, had worked in the domestic led display lighting one of the leading enterprises of Shenzhen City, Chau Ming Technology Co., Ltd. In 2005, Xing Yi founded the vision of optoelectronic, the main production of various indoor and outdoor LED street lights display, a substantial part of exports of US and European markets, has also set up vice-factory in Hangzhou.

One worker who works with Xing Yi, hopes that the vision of optoelectronics in recent years have structural changes occurred, and the sharesholders of a scramble for profits. So funds are tight.

“Failure of vision photo-electron, in essence, because of more competitors. Regardless of quality, at the low end of competition, there is no profit.” LED flood lights Engineering Industry Research Institute Xiao-Fei Zhang pointed out to the newspaper, and then generate the funding strand breaks, arrears-domino effect, the upper reaches of stock and stop production.

One supplier told me the vision of the photoelectron is a family business, and comprehensive management capacity is weak, the end of last year no longer a supplier to the vision of photoelectron.

It is understood that the vision of the photo-electron may be arrears as high as thousands of yuan.

OLED technology will become the next breakthrough for LED lighting industry?

Since 2011, export orders from abroad dropped sharply together with a non-fully developed domestic market. Under such circumstance, many downstream LED street light companies intend to find some breakthrough in OLED technology.

 

OLED is an abbreviation of Organic Light-Emitting Diode, also called Organic Electro-luminesence Display, OELD. It has properties of lightweight and energy saving. This technology was firstly applied on displays. In 2003, OLED technology started to use on MP3 and received positive responds. Compare with LED, OLED was a so called new born baby, having strong vitality and cannot-be-underestimated potential. Facing intense competitive, LED producers started to move their attention in this field.

 OLED technology will become the next breakthrough for LED lighting industry?

In accordance with a recent report issued by SME Research Center of Peking University, the total output value of domestic LED industry is around 150 billion yuan in June, 2012. The estimated annual compound growth rate is 25% in next 3 years. The downstream LED applications, like LED displays, LED backing applications, indoor LED lights, will occupy more than 75% market. Indoor LED lights will become the biggest LED lighting market in near future. The estimated annual output value will be 25 billion yuan in 2012 and 100 billion yuan in 2015.

 

Since lacking of the core technique, most LED chips need to be brought from foreign companies. In most indoor lighting products, the chip cost take over about 60% of total cost. Thus, costs of domestic LED products will maintain in a higher level in short period of time. Downstream market is the fiercest in all LED market. The number of new built LED companies sharply growth recently, more and more manufacturer joint into this battle. Many of them were forced to drop prices, and the profit space was shrinking. Professor Peng Jin, secretary-general of Shenzhen semiconductor industry association indicated that those capable downstream enterprises should not only concentrate on overseas market. Presently, they need pay more attention on upstream, establishing their own LED chip Research and Development Department to create their own LED chip technique. Otherwise, “we are working for our competitors.”

 

The development of OLED technology also provided a new profit growth point for domestic LED manufacturers. Mr. Xiaofei Gao, President of LED Industry Research Institute felt confident about OLED’s future development. “Compare with LED, OLED can stimulate more creative to meet more individual needs”.