How do Chinese LED companies sail overseas?

If you do lighting, if you haven't exported, I'm sorry, you may have gone out. CSA Research statistics show that nearly 10,000 LED lighting companies in China, of which nearly 7,000 are involved in exports.

Whether it is a listed company or a small family business with a scale of only a few million, whether it is located on the coast or inland, “sea” has become a way for lighting companies to compete for water, and each company is trying to find a way to go global. The market's success.

The overseas lighting market is also gradually expanding. CSA Research statistics show that in 2011-2013, China's exports including Asia, Europe, North America, Latin America, Africa, Oceania, including the six continents market, exports grew by nearly 50% annually. In 2011, the export value was 1.58 billion U.S. dollars. In 2012, it increased to 2.65 billion U.S. dollars. In 2013, it continued to grow, reaching 5.05 billion U.S. dollars.

Although the export of China's LED lighting products is showing a thriving scene, there are various problems behind the "gratifying people."

In particular, abroad, "Made in China" is often synonymous with "cheap goods." When some foreign businessmen purchase products from Chinese lighting companies, they often push the prices low. In their view, as long as they are Chinese products, they are worth the price.

In this regard, relevant sources pointed out that many export companies have poor brand awareness and management, low technological content, and limited profit margins. Their situation is not optimistic.

The power tree brand

Some foreigners have "MadeinChina" is the illusion of low quality, and the lighting industry is no exception. During this year's Frankfurt show, companies in the China Pavilion were hardly to be respected by international businesses, and many Chinese companies had to spend heavily on exhibitions in other pavilions.

It is very difficult to change this concept. From the OEM to the brand, the low-quality illusion is also an insurmountable gap for Chinese exporters. According to a survey conducted by the reporter, among nearly 7,000 export companies, OEM and ODM methods are still the mainstream, and there are only a few companies that can promote their products overseas with their own brands.

CSA Research statistics show that among thousands of companies, Shenzhen Yuhongguang is a private enterprise that specializes in exporting LED tubes, and LED tube lamps have entered the top 30 of this series of export products.

When Yuhong Aoguang’s specialized and multi-series products and its differentiated product strategy, he undoubtedly found a very good survival path in overseas markets.

"In 2013, the company's export volume reached 90 million yuan, accounting for 90% of the company's total revenue, and its products were mainly sold to the Middle East." Yuhong Liu, Sales Manager at Yuhong Yu, told reporters that OEM is now the most important business model and its own brand. There is no capacity for consideration at this time.

Shanxi Guangyu is a private enterprise that entered the semiconductor lighting industry in 2000. It has maintained a rapid growth trend in the LED industry. According to CSA Research statistics, its 2013 street lamp export rankings are close to 20.

Dai Guang, general manager of Shanxi Guangyu introduced that at present, Shanxi Guangyu's export products account for 40% to 45% of the company's annual sales. The Main Products are concentrated in Guangyu’s highly advantageous streetlights and mining and mining lamp products, which are mainly sold to European and American markets, and Most of the products are based on ODM.

According to reports, it is very difficult for Chinese companies to play brands abroad. It takes a lot of manpower, material resources, and financial resources to increase awareness of the local people. Understanding of local culture requires a long period of hard work. It is a major challenge for lighting companies that do not have large body mass or international influence.

Dai Feng said, “Especially in European and American markets, the brand is relatively mature, and it is difficult for emerging brands to integrate in. However, in some relatively backward countries, there is a large market space, and the brand recognition of the market is still immature. Use your own brand strategy."

A handful of Chinese companies with extensive overseas experience have begun to cultivate their own brands overseas.

CSA Research statistics show that Sichuan Jiuzhou’s overall export volume in 2013 was among the top 30 in all export companies. “We started to develop overseas markets in the 1990s and lighting exports can achieve good results. This is also due to the understanding of the market and the accumulation of customer resources.” Xie Yongjun, general manager of Sichuan Jiuzhou, told reporters.

"The concentration of lighting brands is relatively low, and Jiuzhou attaches great importance to self-brand, and now 2/3 of its export products use its own brand." Xie Yongjun said that the proportion of Jiuzhou overseas channel market is 30%, respectively. Engineering accounted for 30% and agents accounted for 30%, which also laid a good foundation for the construction of its own brand.

In view of the current status of the vast majority of companies relying mainly on OEM exports, some industry experts pointed out that due to the very low gross profit margin of OEM products, the profitability of enterprises is very sensitive to prices, and export prices often drop by 10%, and companies will face unprofitability. Chart even loses money. "In this case, once the world economy or the financial crisis is encountered, it will be vulnerable to a greater impact, or even a devastating blow."

Correspondingly, 10% of the world's famous brands occupy nearly 60% of the market share. The key to the lighting market's occupation is not to see which country is producing the product, but to see what brand is used in sales.

However, the status quo is that when the current pattern of LED lighting has not yet been determined, for more Chinese companies to survive, they will be able to grow and develop before they can qualify for the brand.