Recently, Dongguan Qinshang Optoelectronics Co., Ltd. (hereinafter referred to as "Qinshang Optoelectronics") introduced LED street lights to the market at an unbelievably low price, causing an uproar. It can be said that some people are happy and some are sad. With the rapid development of the LED industry, low-price trends, as a product of market competition, have brought more space to engineers and dealers, making the prospects for the popularization of LED lighting bright.
In the Qinshang "Lighting Replacement" wealth creation plan launched on June 10, Qinshang Optoelectronics clearly stated its determination to promote LED lighting nationwide through engineering channels. It also vividly compared the LED lighting replacement market to "just like when film cameras were converted to digital cameras, there are huge market opportunities." The low-price strategy is Qinshang Optoelectronics’ first shot for this purpose.
It is reported that the mainstream prices of well-known brand LED street lights in the current market under the same conditions are mostly between 9-12 yuan/watt, and the price of some low-end products is more than 7 yuan/watt. Qinshang Optoelectronics, with its strong financial strength, offers freezing prices that may be lower than the cost, maximizing profits to attract downstream engineers and dealers, so as to promote the smooth progress of "lighting replacement".
A dealer who has maintained a wait-and-see attitude for a long time said that competition in the LED market is particularly fierce now. Good products cannot be sold at high prices, and cheap products cannot be sold without guaranteed performance. LED industry leaders such as Qinshang Optoelectronics have PICCs to guarantee product quality, which benefits dealers, just like dividends and profit distribution. This is a situation he has always wanted to see, and he has been waiting for this opportunity for a long time.
Taking the Shenzhen Expressway-Dameisha Tunnel completed in June 2011 as an example, it has a total length of 3,025 meters and is equipped with 1,260 LED tunnel lights with a power of 109 watts. In the price range of 12-15 yuan/watt last year, the quoted price was 1.648 million-2.06 million yuan; and based on current price estimates, the quoted price is only more than 600,000 yuan, which means the cost of installing LED tunnel lights has dropped by more than 300-400 yuan/meter.
Almost all the profits converted from the price difference saved by the project are shared by the project contractor, dealers and owners. Qinshang Optoelectronics is using this cost-saving ledger to enter the LED street lighting market.
Qinshang Optoelectronics' "lighting replacement" wealth creation plan will be one of the focuses of Qinshang Optoelectronics in the next few years. As the capital level exchanges low prices for engineers and dealers to "fall", it will inevitably cause a series of chain reactions in the LED lighting industry. The following three aspects can be foreseen: first, to increase the popularity of LED lighting products; second, to promote the improvement of LED technology and improve product cost performance; third, to trigger a price war in the LED industry, accelerate industry reshuffle, and eliminate many LED companies that are not very competitive. In the fourth lighting innovation period that advocates energy conservation and environmental protection, if Qinshang Optoelectronics becomes Galanz and Lenovo in the LED industry, the ultimate profit will be made by the vast number of consumers of LED lighting products.
Recently, at the "Qinshang's 'Lighting Replacement' Wealth Creation Plan and New Product Launch Conference" held by Dongguan Qinshang Optoelectronics Co., Ltd. (hereinafter referred to as "Qinshang Optoelectronics"), Qinshang Optoelectronics made a high-profile statement, "To make dealers more dignified," and called on engineering dealers to work with Qinshang Optoelectronics to seize the golden beachhead for project replacement.
At this press conference, the prices of a series of new products launched by Qinshang Optoelectronics have been significantly reduced compared to the past. For example, LED street lamps cost more than 4 yuan/watt and LED T8 lamps cost about 14 yuan. The price of a single product is lower than the production cost of most LED companies in the industry.
Qinshang Optoelectronics, which has always been known for its high quality, has cut prices so aggressively and dumped the market at low prices. Many people in the industry cannot see its intentions clearly, and doubts have arisen one after another. The industry joked that Qinshang was "crazy", and there were even rumors that Qinshang Optoelectronics was dumping the products at low prices, and that Li Xuliang was planning to dump the goods and run away.
Qinshang currently has more than 1.7 billion yuan in cash on its books, the most among listed LED companies in the industry. This provides financial guarantee for Qinshang Optoelectronics to implement its low-price strategy.
The new senior management team of Qinshang Optoelectronics said, “Instead of investing so much of the brand advertising budget in various media every year, it is better to give these budgets directly back to our dealers and customers, giving them back with real low prices, giving them more advantages in the competition of terminals, and it is more conducive for them to grab The dealers have seized more markets and made money, and they are more willing to fight for the market with Qinshang Optoelectronics. Users have enjoyed the benefits brought by Qinshang Optoelectronics, and the effect of this kind of word-of-mouth publicity is more direct and lasting than the media and advertising bombardment.”
Some people question that Qinshang Optoelectronics’ blind pursuit of price will sacrifice product quality
Li Xuliang, former chairman of Qinshang Optoelectronics, declared at the meeting, "The low price of Qinshang Optoelectronics' products does not mean low quality. Qinshang Optoelectronics launched ultra-high cost-effective products at an unprecedented low price and at a loss to better help engineering dealers seize the trillion-dollar replacement lighting market."
"'Qinshang Manufacturing' is a brand. Qinshang Optoelectronics has a strict quality supervision system, from raw material procurement to product development and design, from production management to laboratory testing. Qinshang Optoelectronics' pursuit of quality is unimaginable in the industry. The reason for doing this is to ensure that no matter the price, Qinshang's products must be high-quality." Li Xuliang pointed out that low price does not mean low quality. Qinshang Optoelectronics would rather sacrifice some of its own interests to work for the interests of dealers and users. Qinshang Optoelectronics is the only company in the industry that has obtained the PICC quality contract. If the user thinks that there is a quality problem with Qinshang Optoelectronics' products after use, and it is confirmed after testing that it is indeed a quality problem with Qinshang Optoelectronics, he or she can directly file a claim with Qinshang Optoelectronics.
It is understood that Qinshang Optoelectronics has launched a series of LED outdoor and indoor lighting products, all of which are cost-effective products that are "envy of peers". Among them, the most eye-catching ones are LED street lights that cost more than 4 yuan per watt and LED T8 lamps that only cost about 14 yuan. These street lights and circulation products are far lower than the current cost of ordinary enterprises and are very cost-effective. A dealer who has cooperated with Qinshang Optoelectronics for five years said with emotion, "Low price does not mean low quality. Qinshang Optoelectronics can be said to have paid the maximum price difference to customers regardless of cost. As an engineer and distributor, it is very helpful for us to go deeper into the lighting replacement market."
Recently, Qinshang Optoelectronics released the "Lighting Replacement" wealth creation plan and a full range of new products in 2014, claiming that LED street lights will cost more than 4 yuan/watt and LED T8 lamp tubes will be introduced to the market at a low price of about 14 yuan, joining hands with engineering dealers to seize the trillion-dollar replacement lighting market. As soon as this move came out, the industry was in an uproar.
The author conducted a survey on the prices of LED products on the market. The current price of street lamp products from mainstream LED companies in the industry is about 9 yuan to 12 yuan/watt, and the current price of LED street lamps from low-end copycat manufacturers is more than 7 yuan/watt. Industry insiders have broken down Qinshang’s low-priced LED street light products and found that the minimum raw material cost is no less than 6 yuan/watt. This means that including labor and management costs, the LED street lights that Qinshang put on the market at a price of more than 4 yuan/watt will lose at least more than 3 yuan/watt.
In the eyes of the outside world, Qinshang’s move will definitely result in losses. However, Qinshang’s “loss dumping” was “carefully prepared.”
According to previous media reports, Qinshangxin’s senior management team stated that they will use the lost money as advertising fees to attract dealers, giving dealers an advantage in terminal competition and thus monopolizing the market.
The author checked the "Qinshang Optoelectronics 2013 Annual Report". The report showed that as of the end of 2013, Qinshang Optoelectronics had about 1.7 billion in cash on its books. Sufficient cash flow provides strong support for Qinshang's high-profile and low-price impact on the market.
"But if you use various resources well, you may not necessarily lose money, but you may also make money." Li Xuliang, former chairman of Qinshang Optoelectronics, said in an interview with the media that he proposed to use "EMC+BT" to tailor personalized solutions for users with energy-saving needs. By cooperating with insurance companies to purchase product quality insurance and commercial credit insurance, it will assist the smooth progress of the promotion and application of the EMC model and allow customers to replace lamps for free.
In the process of implementing contract energy management, according to the signed EMC contract, Qinshang will cooperate with a third-party energy-saving company to invest in LED lighting renovation. Qinshang Optoelectronics can agree with the third-party energy-saving company and the owner on the project construction investment ratio and the corresponding energy-saving benefit sharing ratio and sharing period. After the cooperation period expires, all energy-saving equipment and income will 100% belong to the owner. This not only solves the problem of "where does the money come from" for the owner's energy-saving transformation, but the money Qinshang loses on the product can be fully recovered through the shared energy-saving benefits.
"Qinshang has really played the role of the industry's 'price butcher' this time, with high reliability, high cost performance, and prices below cost. The Qinshang brand will greatly impact LED product competitors in the industry. If Qinshang's low-price strategy is implemented for a long time, few companies will be able to survive." Industry insiders pointed out that Qinshang's move will not only help it quickly seize the billion-dollar replacement lighting market, but will also accelerate the industry's reshuffle and the survival of the fittest.
ANNA