How do domestic LED companies "pick peaches" in overseas markets?

Nowadays, in the process of accelerating global integration, Chinese LED companies are gradually taking a longer-term view and beginning to realize that if a company wants to develop and grow, it is not enough to rely solely on endogenous forces. It also needs to rely on external forces. The internal and external forces complement each other and can be the icing on the cake.

Moreover, as an important LED manufacturing base and the world's largest application market, China has become a key market for international LED giants. International companies in developed countries and regions have gradually transferred the labor-intensive midstream and downstream links of the industrial chain to developing countries and regions such as mainland China and Malaysia through mergers, acquisitions, reorganizations, etc., to achieve the integration of upstream, midstream and downstream under a unified global marketing strategy. For example, industry leaders such as Cree from the United States, Everlight from Taiwan, Baihong, and Osram have set up factories in mainland China.

Therefore, Chinese LED display companies urgently need to go global, and many companies have also turned their focus to the export market to enhance their core competitiveness. So, how do domestic LED companies “pick peaches” and develop overseas markets?

Set up camp

On June 17, Alto Electronics issued an announcement: Alto Electronics (Hong Kong) Co., Ltd., a wholly-owned subsidiary of Shenzhen Alto Electronics Co., Ltd., has recently completed the registration of its wholly-owned subsidiary Alto Electronics Japan Co., Ltd. (hereinafter referred to as "Alto Japan") in Japan. Alto Electronics stated that the establishment of Alto Japan will help promote the company's internationalization process, further promote the continued growth of overseas business, and broaden the company's international development path.

As ​​for companies like Alto Electronics that have set up shop abroad, in addition to Alto, Absen, Leyard, and Dongshan Precision have also already made arrangements. In 2014, in order to strengthen the physical operations of Absen USA and Absen Germany, Absen registered and established wholly-owned subsidiaries Hong Kong Absen, Absen Middle East Company, Absen Japan Company, and Absen Mexico wholly-owned subsidiary (grandson) companies were also established one after another;

In 2014, Leyard established five new international holding companies, including overseas subsidiaries Leyard (Europe) Co., Ltd., overseas subsidiaries (USA) Co., Ltd., Leyard(Brazil) Co., Ltd., Leyard (Japan) Co., Ltd. and PanpacifiInvestent.Inc;

In 2015, Dongshan Precision plans to establish a wholly-owned subsidiary Dongshan Precision (Finland) Co., Ltd. in Finland and a wholly-owned subsidiary Dongshan Precision (USA) Co., Ltd. in the United States.

Overseas mergers and acquisitions

Of course, in addition to setting up camp abroad, overseas mergers and acquisitions are not uncommon. In 2015, Leyard acquired Planar Electronics of the United States to expand its existing LED display sales scope;

In 2016, Dongshan Precision planned to acquire 100% of the equity of MFLX for a consideration of approximately 4 billion yuan. As the surviving company after the merger, MFLX became an indirect wholly-owned subsidiary of Dongshan Precision.

Other ways to "pick peaches" include: RightFor outsourcing projects, the representative company is Zhou Ming. In 2015, Unilumin increased its investment in Century Dingyuan Investment Company, and through AVIC Tongtai's participation in the renovation of the Hungarian public lighting LED project, it became the company's road lighting EMC business;

Localization of brand channels, Absen increased advertising efforts in overseas professional magazines;

Cross-border sports marketing, for example, Lehman signed a cooperation agreement with the Portuguese Football League this year and announced that it will exclusively title the Portuguese second-tier football league. In the next three and a half years, the Portuguese Professional Football League will be renamed Lehman Portuguese League.

Obviously, Chinese companies can "go global" through active cross-border mergers and acquisitions, overseas factory setting, project contracting and other methods.

Sui Shirong, director of the Guangdong Provincial Semiconductor Lighting Industry Joint Innovation Center and director of the Guangdong Provincial Hi-Tech Emerging Industry Development Research Institute, at the 2016 China LED Industry International Competitiveness Development Conference and the Second China LED Enterprise International Competitiveness TOP10 Award CeremonySaid: "China actively 'goes out' through cross-border mergers and acquisitions, overseas factories, project contracting and other methods, leveraging international market channels, the existing brand value of major international manufacturers, and core patented technologies to avoid the risk of intellectual property disputes and enhance international competitiveness."

The author believes that as the domestic market competition enters the "Red Ocean" environment, the opportunities in the export market are greater than those in the domestic market. We look forward to Chinese companies achieving better results in the export field in the future development process!