Factors restricting the development of LED lighting business

　　2014 , LED products began to gradually replace traditional lighting products. Companies are facing a transition , increasingly fierce price war , the industry generally felt tremendous pressure.

　　First, significant increase in hidden costs

　　In line with the enterprise switching products , continue to improve and enrich the product line , larger research and development costs ; to meet the sales , stocking factories to quickly causing sluggish stock , followed by corporate cash flow will be affected , resulting in lower capital utilization efficiency . These hidden costs led to increased business is difficult to achieve from the side edge of hematopoietic development .

　　Second, the operating margin reduced

　　In order to establish the size advantage , some companies adopt cost leadership strategy , active low prices in order to plunder the market, expect a competitive threshold, forcing the price of other brands can only follow up on the way to the use of special promotional ship , particularly in the T8 tube bulb, the T5 light source such as a stent is particularly intense circulation category . Compared to traditional lighting stage , bringing the industry average gross profit margin dropped significantly .

　　Third, the cost of greatly increased channel marketing

　　For the rapid construction of the marketing network , regardless of the cost invested some companies marketing costs , many marketers into various delivery Showcase, send samples , advertising , distribution and other preferential policies one after another, those in the traditional lighting of the times is unthinkable.