Advantages of my country's LED industry and its development path under the new economic normal

As the listing bell rang, Mulinsen jumped from an ordinary "private enterprise" to an A-share "upstart". With 5 daily limit results and a market value of more than 20 billion, it became the leader in the packaging field in mainland China. It broke into the top ten of the world's LEDs for the first time, transformed into the world's LED upstart, and once became an industry legend.

Jamie Fox, chief LED analyst at IHS Technology, an authoritative market research institution, said that for major suppliers, the rise of Mulinsen sends a clear signal that Chinese companies will soon become major competitors in the global LED business. Looking at China's LED industry competing in the world market, it has the following major advantages.

In terms of the industrial chain, after more than 30 years of development, China's LED industry has initially formed a relatively complete industrial chain. After going through the process of buying devices, chips, and epitaxial wafers, China's LED industry has now achieved independent production of epitaxial wafers and chips. Taking the Pearl River Delta, Yangtze River Delta, Fujian Delta and other industrial clusters as the latitude and longitude, many companies are scattered among them; upstream, a group of heavyweight companies such as Jingyuan, Sanan, Dehao, Huacan, and Qianzhao are located, which can be said to be unparalleled in terms of MOCVD quantity; midstream, MLS, Yiguang, Nationstar, Ruifeng, Changfang, Hongli, etc. have the largest production capacity; downstream, NVC, Fo Zhao, Qinshang, Sunshine and other tens of thousands of companies form the LED industry ecosystem.

On the data level, Liu Shengping, chairman of the China Lighting Electrical Appliances Association, said that in the context of global economic integration, China's lighting industry is increasingly integrating into the international market. In the global market, lighting fixtures account for approximately 2/3 of the total market. Exports of lighting products account for about 45-50% of China's total output. In 2014, industry-wide sales will exceed RMB 500 billion; corporate product exports will reach US$40 billion. There are tens of thousands of lighting manufacturers nationwide, and there are 7,000 companies exporting LED lighting products nationwide. The top 20 countries and regions account for more than 75% of the total, and their products are sold in 218 countries and regions around the world.

At the corporate level, in 2014, Osram laid off employees, Philips was split off, Samsung reduced its front lines, etc. During the transformation period, international giants invariably began to reduce their operations and adopt a more concentrated and focused way of survival. For large domestic companies, this is a rare opportunity. Sanan's acquisition of Luminus in the United States, Everlight's patent war with Nichia, Mulinsen's products spreading to North America and the Middle East, TCP's strong dominance in North America, NVC's entry into overseas markets, Jingneng's possession of more than 200 technology patents, etc., all indicate the determination and confidence of Chinese LED companies to conquer the world.

In the LED era, the global LED lighting market has a capacity of about US$150 billion. Except for the United States, Japan and some European markets, where channel development is relatively mature and concentrated, and it is difficult for new brands to enter, the channel construction and brand building of the hardware and building materials lighting markets in most emerging countries are relatively lagging behind, with low brand concentration and hardware channels being the mainstay. At the same time, international giants such as Philips, Osram, and GE are in a period of transformation, which is the best time for Chinese brands to rise. So, what preparations should Chinese LED companies make under the new normal?

First of all, know yourself and the enemy, and understand the first-line market. The economy, politics, culture, religion, customs, channel markets, etc. of the regional market have become the prerequisites for enterprises to enter the market, so complete research is required.

Secondly, blacksmithing needs to be strong and have its own patent. Due to the late start of China's LED industry, foreign giants have basically completed the upstream patent layout in the early stages of the industry, which poses a greater challenge for Chinese companies to enter the international market. Luminus in the United States, the patent war between Everlight and Nichia, etc. are examples of breaking out of the "patent jungle".

Third, do your own professional stuff and have a clear market positioning. The uniqueness of an enterprise determines that the enterprise will present different situations in different markets.

Fourth, product combination is reasonable. Tailor-made product portfolio, price policy, distribution system, public relations, and preferably a well-established marketing team and advertising partners.

Fifth, before the army is sent out, food and grass should go first, and a good financial and logistics system should be established. Establishing brand building channels is a logistics supply war, so a sound financial and production, sales and logistics system must be in place.

For LED companies, entering foreign markets (especially markets such as North America) means that their products and brands have entered the first echelon in the world. We hope that more companies in the Chinese lighting industry will go abroad and become truly world-class lighting brands.