"This year's business is not very good, not warm, and there are not many orders." A Yuan, assistant general manager of an LED lighting factory in Zhongshan Guzhen, told reporters. Ayuan's factory specializes in LED decorative lighting products. In 2009, this factory with only 40 people set a sales record of over 10 million. In 2010, all predictions about economic recovery and growth are being fulfilled, and the lighting industry's upstart, LED lighting, is developing at an extraordinary speed. However, Ayuan's factory needs to share the growth. The benefits don't seem to be that easy.
Competition dilemma: vicious competition driven by profiteering
“In the early years, our profits can reach 50% or even more. It is very good to be able to achieve 30% now,” said Ayuan. The factory where Ayuan is located was established in 2005. It is a group of enterprises that have accompanied the rise of “LED fever”. It mainly focuses on outdoor decorative LED products such as lamp strips and guardrail tubes. Where LEDs burst, the rapidly growing market demand allows small factories like Ayuan to easily find market space. Driven by huge profits, a large number of uneven manufacturers began to enter the field of Nuggets. "Don't look at our factory, there are only 40 people, but it is not too small in this industry. The workshops for three or five people are everywhere." Ayuan told reporters.
With the entry of a large number of uneven factories, the market environment began to become bad, and the price war was faced. Well-known companies in the industry can still maintain a certain level of price, while a small factory like Ayuan must face pressure from both sides. "We offer 40 yuan of products, and some factory homes only report more than 20 yuan. And customers mainly look at the price, can't do it." Faced with bad competition, Ayuan seems helpless. LED decorative lights are not high in technical content, and most of them are mainly assembled with raw materials. In order to ensure price competitiveness, under the price war, Ayuan's boss had to consider reducing the cost of raw materials. The cost control of raw materials is caused by the decline in product quality and the increasing rate of customer repairs. Ayuan faces these complaints every day and is overwhelmed.
At present, more and more LED decorative lighting companies are beginning to fall into such a dilemma.
Development dilemma: before the technical and qualification bottlenecks
"We can also do LED light source, but also can do street lights, but they are all samples, no one buys." Ayuan told reporters. “When big orders come over, customers will definitely come to see factories and do research. Our qualifications are not high, and we lack core technology. It is difficult to get such orders.” The pain of small enterprises is reflected in the enterprises where Ayuan is located. : Not willing to indulge in low-quality competition, and no strength to develop forward.
In the field of LEDs, decorative products are only a small part, and the prospects are more optimistic about the functional LED light source, indoor lighting, commercial lighting and other fields. With the rise of LED lighting, the traditional lighting industry giants have entered the LED, aiming at the functional light source and lighting field. However, SMEs lack the corresponding resources, technology, manpower and other resource integration capabilities, and face development difficulties.
Market dawn: price is no longer the only consideration
With the increasing use of LED lighting products, the market is gradually becoming more rational for LED products. “The former customers mostly only looked at the price, regardless of the quality of the product. It is probably that some customers have suffered from the inferior products, and now everyone has become more rational.” Ayuan said. At the same time, in the last two years, traditional lighting giants have gradually entered the LED industry to bring competition to a higher level. In any case, many funds and companies are now entering the LED industry, and the industry is still profiteering. I believe that LEDs will definitely undergo a cruel reshuffle in the future. Ayuan predicted this.
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