Establishing a new channel for the LED industry remains to be seen

[Source: "High- tech LED- lighting market " November issue ]

In the traditional market environment, the “ranking” of commercial lighting channels is relatively stable. With the “spoiler” of LED commercials, the market pattern of commercial lighting has quietly changed. So, what is the future trend of the commercial photo market? How do corporate businesses respond? The following is the view of the "Lighting Market" reporters from the industry.

The rise of traditional lighting sales blocked LED products

Hu Zhiqiang, General Manager of Langshi Lighting Nanjing Marketing Center (Organization / Li Shuiwen)

Due to the economic downturn in recent years, the Nanjing lighting market has almost reached saturation. Coupled with the rapid rise of the LED industry, the sales volume of traditional commercial lighting brand products has dropped by about 40%. The trend of most commercial brands is declining.

With the rise of the LED industry, traditional commercial products have gradually faded in the market and will gradually be replaced by LED lighting. At present, LED products account for about 40% of our store sales. Some merchants account for 50% of LED sales.

It can be seen that the market share of traditional commercial photos will become smaller and smaller, especially for traditional gold halide spotlights, and products such as traditional track spotlights, downlights, lamps, bulbs are also greatly affected. In recent years, many companies have been trying to deal with the inventory of traditional lighting products. For example, to distribute goods to businesses, engage in promotions, etc.

If the dealers in the Nanjing market want to represent the Op brand, they need to purchase 20,000 yuan of traditional gold halide spotlights, but there is no requirement for other home lighting products. Sanxiong Aurora gold halide spotlights are only 20 yuan, and NVC Lighting also has several traditional spotlights in the crazy "special offer."

Although the LED market is not standardized, such as price confusion, uneven quality, etc., most LED companies are still optimistic about its development prospects. When the LED lights entered the market in the first two years, many companies and businesses made a lot of money.

Now, the profit of operating brand LED lamps is still relatively high. For example, the 3 watt ceiling lamp of Opal Lighting has a price of about 70 yuan and is sold to consumers for around 110 yuan. Even for the low-end LED brand, the 3 watt ceiling lamp with a price of 15 yuan will cost 30 yuan to the consumer, at least 50% of the profit. The same set of traditional commercial products has a low profit margin, and some sets of lamps earn a few dollars.

Therefore, traditional commercial photos will slowly shrink in the market, and LED products will quickly occupy the commercial market by virtue of the advantages of “energy saving, environmental protection” and the pursuit of high profits by merchants.

Operation center channel information communication lag

Li Xiaoqiang, dealer of NVC Lighting Co., Ltd., Chengdu Bayi Lighting City (Organization / Qiu Zuling)

NVC Lighting has self-innovation in channel expansion, such as the establishment of a regional operation center. However, this model of setting up an operation center seems to have advantages and disadvantages for dealers.

On the plus side, NVC can not only firmly control the channel, but also expand at a low cost. The distribution rights will be centralized and the management rights will be delegated. The previous small-area exclusive distribution system and the exclusive store system will be responsible for the transformation of the operation center.

In this way, the interests of the operation center are closely related to the sales scale within the jurisdiction, effectively mobilizing its enthusiasm. At the same time, NVC Lighting Headquarters has got rid of the complicated affairs of directly managing many dealers in the front line, and can focus on product manufacturing, R&D and brand building and promotion.

On the downside, the NVC Operations Center has become the link between the company and many distributors. Then the company policy is conveyed through the operation center, and the problems of the first-line dealers and some suggestions and opinions are given to the headquarters through the operation center. This has the problem of lagging communication between the headquarters and the dealer.

Therefore, there are still gaps and loopholes in the price adjustment of NVC products according to market changes. The price basis of many products exceeds the actual price that should be sold. If the price is not adjusted according to market conditions, this is very unfavorable for dealers to sell products.

Commercial channels are suitable for direct users

Sanxiong Aurora Baise Lighting City Dealer Hu Jiang (finishing / Qiu Zuling)

At present, there are too many LED lighting products on the market, there is no bottom line in the price war, and only the amount of the lamps does not consider the stability, price, life, and light decay of the lamps. At the same time, LED sellers are rushing to sell some low-priced products, which has affected the development of the entire LED industry. Therefore, it is necessary for the government, industry associations and media to make an appeal to guide consumers to buy LEDs, and to value quality rather than stay at the price.

In the long run, LED is definitely a future trend, so the gradual improvement of the channel is very important. Then, in the continuous development of LED, there are many problems with the improvement process of the channel. For example, Sanxiong Aurora's cargo channel has some drawbacks: it is too easy to get the goods, and many of the intermediate circulation channels have low profit margins, so the profits to the dealers are thinner. The brands that NVC and Opp have done well are that they are not so easy to get the goods, and the channel protection is very good, so it also protects the interests of the brand dealers.

The sales channel model of each brand, traditional lighting or commercial lighting is different. For example, Sanxiong's commercial lighting channel strategy is to go directly to users. This is different from the traditional mode of mass lighting brand channels, taking logistics companies, general agents, and secondary dealers. Sanxiong's commercial lighting is directly connected to the manufacturer and face-to-face with the users. The difference between this model and the brand positioning is not suitable for the traditional lighting mode.

Merchants operate multiple LED brands into a trend

Gao Mingwei, General Manager of Nanjing Guangshengdun Lighting Co., Ltd. (Organization / Li Shuiwen)

In recent years, Sidon Lighting has also invested heavily in the development of LED products and layout lighting markets. We started to operate Sidon products in 2006 and have already operated this brand in the Nanjing market.

The LED industry is growing at an alarming rate. At present, LED products account for 35% of our total sales, and this number is still rising. The products of Seaton Lighting are positioned at the middle and high end, relatively high. A set of 3 watt ceiling lamps sells more than 100 yuan in the market, which is more difficult for ordinary consumers to compare. Generally used in high-end places such as engineering projects or villas. many. This year, we designed the lighting for a villa for our customers. The single LED product used more than 60,000 yuan.

At present, the price of LED products in traditional lighting companies is generally high, mainly because it does not reduce costs and prices through economies of scale and efficient management, achieving the highest price/performance ratio for lighting applications.

In the Nanjing market, traditional lighting companies rely on existing brands to make LED products difficult. After all, traditional lighting companies are affected by many factors such as price, technology and product, which will constrain the market sales of their LED products. Therefore, many traditional lighting dealers will find another one or several LED companies to cooperate. For example, Sanxiong Aurora, Delta, Jiamei, Sanli, NVC, Op, etc. in Nanjing market will almost always operate several LED brands. Most of these merchants will consider some large-scale enterprises that are positioned at the mid-end and are competitive in technology, products, scale, talents, etc., and professionally do LED products, so as to meet consumers' higher requirements for product prices and technology. Make up for the single defect of the original brand product.

Therefore, multi-brand operation will become the choice of more businesses, but there are still many merchants who will always follow the old brands for many years.

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