In recent years, as countries around the world accelerate their plans to phase out incandescent lamps, the demand for LED lighting markets in the European Union, the United States and the Middle East has grown rapidly. The United States is one of the regions with the largest LED electricity consumption and is also the country with the fastest development of the LED industry.
With the coming into effect of new energy regulations in the United States, U.S. national policies and information indicate that incandescent lamps, which have been used for more than 100 years, have withdrawn from the market and been fully replaced by LEDs. 2014 will be a critical year for the explosive growth of the U.S. LED market. Under such circumstances, how to effectively enter such a large U.S. market is a concern for all LED companies.
In 2012, my country's LED display market sales totaled 25.3 billion yuan, a year-on-year increase of 15%. It is estimated that the market size of the national LED display industry will increase by 10%-15% in 2013, with a total market volume of about 28 billion yuan. In 2013, LED lighting product sales were RMB 66 billion, of which exports were US$6 billion. The global LED lighting market is approximately US$63 billion, and North American LED imports have reached US$20 billion.
Judging from the development of LED lighting markets in various regions, the government in the North American market is gradually increasing its support for LED lighting. The number of subsidies for lighting products under programs such as the U.S. Energy Star (Energy Star) has grown rapidly, which has further reduced the price of LED lighting products. Manufacturers such as CREE are optimistic about the development of the LED lighting market in 2014 and expect that the sales growth of replacement lighting products will become the next business focus. In 2014, the usage growth rate of LED lighting products in North America is expected to reach 72%.
Although the export prospects are good, LED companies have also encountered many difficulties in the process of entering overseas markets. Gao Boli, general manager of HiSilicon Optoelectronics, said: "Currently, the problems faced by Chinese LED manufacturers are working alone, fragmented, and price-red sea battles. These factors have seriously restricted the healthy development of the LED industry. Competition in brand channels will become more intense in the future." Judging from the situation of Chinese LED companies in the U.S. market, the lack of brand image, lagging market information, and lack of marketing means have caused many Chinese LED companies to still be in the U.S. market even though they have many orders.edge. Once the products leave the port, we don’t know where they are going, nor who the end buyers are, nor can we tell which company produced these good products.
Yu Lingyun, chairman of the American LED Association, said that many LED products appearing in the American market are marked "MADE IN CHINA", but no one can tell which company these good products come from. How to build corporate brands of Chinese products in the U.S. market and enhance competitiveness are issues that all LED export companies are concerned about and discussing. Therefore, powerful Chinese companies must adopt multiple channels and strategies to directly enter the US market, break away from the current invisible status, and become independent and clear target suppliers.
Corporate concerns - high-end products but no brand
Chinese LED products present a "high-end but no-brand" situation in the U.S. market, resulting in a large number of OEM products that make Chinese own brands rarely accepted and recognized by the U.S. market. In a sense, Chinese products that account for a huge share of the U.S. market do not directly participate in competition in the U.S. market.
Zhou Yuguo, the relevant person in charge of Shenzhen Ruituo Display Technology Co., Ltd., said that Ruituo Display was established in 1997 and has been for 17 years. At the beginning, Ruituo Display was also an OEM and was no stranger to the American market. He said: "In the U.S. market, our exports are at a disadvantage. It is the so-called branded product without a brand. Our earliest exports were all cooperation with local companies in the United States, and we even provided OEM services for them. Therefore, the brand value and added value of our products are basically non-existent. We just work for others and do simple processing." But he concluded that although it has been in the market for so many years, its brand awareness is too small.
In this regard, Yu Lingyun said that the lack of brand image, lagging market information, and lack of marketing methods are currently the main problems of Chinese LED companies in the U.S. market. Even though many Chinese LED export companies have fixed U.S. orders, they do not have the core to enter the market. Once the product leaves the port, you don’t know where your product is going or who the end buyer is. "Once the products leave the port, they don't know where they are shipped, nor who the end buyer is, and consumers can't tell which company produces these good products." Yu Lingyun said, "Strong Chinese companies must use a variety of strategies to directly enter the U.S. market, break away from the status of 'invisible people', and become independent and clear target suppliers." He said.
Certification troubles - price but no market
In addition to the embarrassing "brand but no brand" situation, the US LED market access system is also very strict, with mandatory UL certification and selective "Energy Star" certification, etc. UL certification is a good thing, but in addition to whether the company's products can meet the certification standards is a problem, the certification itself is also quite time-consuming and energy-consuming. Since there is no brand bargaining power, one of the main criteria for middlemen to select Chinese suppliers is price. As a result, some companies sell products at lower prices by not certifying or choosing certifications other than UL.
Li Fan, chairman of Shenzhen Xinliming Technology Co., Ltd., said that his company passed UL certification in 2008, and now other certifications have basically been completed one after another. "But our customers often call and say that our selling price is several times higher than others, which is quite distressing.
Mr. Yao from Quanhua Optoelectronics said that Jinhua Optoelectronics has actually been exporting to the United States for nearly two years, and has encountered many problems in the export process. On the one hand, the certification of LED lighting in the United States has been gradually strengthened. In the past two or three years, American consumers and importers have increasingly demanded certification. In addition, from the domestic procurement market, many small and medium-sized dealers cannot accept the price of UL certified products. They prefer to choose products with basic certification, but may not be UL certified, which is cheaper.
At present, a considerable number of Chinese LED enterprise products are exported to the United States, and the United States is highly dependent on UL products. UL is a stepping stone to the US LED market. Without UL certification, it is impossible to enter the US market. However, UL certification is expensive every year. A UL certification requires 500,000 yuan per certification number per quarter.It costs more than 1,000 US dollars. Even though the product has no sales but the certification number is listed on the US website, it still needs to be certified every quarter. Xie Zuhua, general manager of Minbang Optoelectronics Technology Co., Ltd., said: "In this way, it will be spent on the factory inspection fee for certification every year, as well as the maintenance fee for each verification number at the end of the year, which costs tens of thousands of dollars a year. After certification, the annual maintenance cost of certification may cost 100,000 to 200,000 yuan. Each product needs to be certified, and one certification requires 100,000 yuan. Yuan, add a model and add fees, so the certification fee is very high once you do it. You have already invested a lot of money in certification fees before you open up the U.S. market, and you have not yet obtained an order. This is the reason why many Chinese companies have not certified their products.” Therefore, when a company has full economic strength, certified products and breaking into the U.S. market barriers become channels to prove the company’s strength and one of the ways to gain competitive advantage.
my country is the largest supplier of LEDs to the United States. China accounts for more than 70% of LED products imported into the United States. With the introduction of policies and information from some U.S. countries, the demand for LEDs in the U.S. market will continue to expand. Faced with such opportunities, domestic enterprises must not only make good products, but also pay attention to resource integration and sharing among enterprises to improve the current embarrassing situation of "having brands but not branding" in the international market. Enterprises should strengthen exchanges, unite as a team, and increase the intensity and speed of occupying the U.S. LED market share.
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