LED companies how to price war"

Statistics show that China's LED companies rely on exports of 80% of the products, due to the downturn in the U.S. and European markets as well as foreign customers continue to lower prices and other factors, the domestic LED orders and profits fell sharply. Since the beginning of the year, the mainland LED companies from Europe and the United States orders dropped 30% of the situation has been everywhere. At present, the domestic LED terminal application market is not fully open, in the domestic and foreign markets continue to attack, the rapid occupation of the market by low-cost seems to be the most direct and effective means to get rid of their plight.

Industry insiders believe that the current price decline is mainly based on upstream capacity expansion too fast, while the downstream application market development is not large enough, resulting in the upstream and downstream capacity mismatch caused by short-term overcapacity. Whether it is an international enterprise and domestic enterprises, after the early huge investment, the market is not as optimistic as expected, especially for the lack of financial strength of small and medium enterprises, in order to survive only by "low price" to occupy the market.

Last year, the chip prices fell as high as 30% ~ 50%, the industry have lamented the price drop too much, and it was asserted that 2012 is likely to be a LED industry price".

"Price war" for a long time, appeared in the LED industry today, many people have different views on this. Some people think that this is more favorable to the development of enterprises, is bound to allow enterprises to seek technological breakthroughs and improve management capabilities, and reduce costs. However, it was also suggested that the current low price competition on the LED market, mostly through the adjustment of raw materials to achieve the purpose, is still in an unhealthy state of development. As a traditional competitive means of price war, appear in the current rapid development of the LED industry, in the end will bring what kind of impact on LED?

Avoid "bad money drives out good money" abnormal development

In January this year, in the fierce price competition in the south area, a lighting brand manufacturers to let the industry surprised price terminal under $10 to replace 40W incandescent lamp, LED bulb lamp launched, making South Korea to replace the traditional 40W bulb average price reached $10.4, down 13%. Coincidentally, in April, a well-known domestic LED companies, a high-profile announcement after 4 months, the equivalent brightness of 40W, 60W bulb factory price will not exceed $5. A message, an uproar in the industry. The company is known as a new generation of "price busters Korean manufacturers".

Talking about price reasons, most enterprises view almost exactly the same, it is hoped that through the price to attract international giants of large orders, realize large-scale production, for further price cuts, and thus quickly open the domestic LED lighting market. However, have to pay attention to is, some small enterprises ", is to follow the trend of the price of" inferior products into market, trying to fish in troubled waters, grab a cup of soup.

Because the LED industry is still no uniform national standards, so the quality of products on the market is uneven, resulting in the price is also very uniform. Many enterprises to reduce the cost of poor quality raw materials, and then to occupy the market with ultra-low prices, which is not only conducive to the healthy development of the LED price system, but also to combat consumer confidence in the use of LED products. As Zhejiang sunshine lighting group, general manager of Limited by Share Ltd Yong Yong said: blind low price war will cause the LED market 'bad money drives out good money' abnormal shape. "

And what must have felt the price drop is an important manifestation of the enterprise is a fatal killer. Price war, general manager of Chinese OPTILED District Lv Weidong told reporters: "semiconductor lighting" OPTILED not in price competition, we always have this view, only the competitiveness of enterprises will be lack of cultivation to war, actually this kind of blind prices are not conducive to the development of the industry and market. We believe that with the continuous improvement of technology, through the control of the cost of materials and changes in the design of the structure is the key to reduce costs. Of course, according to the international chip cost reduction, we will adjust the price of the product, but we will not malicious price competition. "

Henderson market director said: "Huaimin left for the price to have a healthy concept, a good company good product should give it a good price, it can continue to provide good products, to provide better quality products and services for the society. If you blindly compress the price, it will lead to a reduction in corporate profits, whether employees or business development will be lack of financial support, not to mention the brand. The future will be the road to shoddy, even if the price is cheap, but the quality can not be guaranteed, it is also a consumer irresponsible. "

Price with reason

Taiwan presided over the industry, big brother Jacky Wu switch to do LED, visible LED industry hot degree. As a promising sunrise industry in the world, LED attracted people from all walks of life. In Chinese,, of the LED industry's passion can be seen from three aspects: the competing market of large enterprises; industry, for medium-sized enterprises, to push new products, expand production; for no technology, no talent, no funds "of small businesses, even between shoe enterprises can be transformed overnight LED enterprise. However, the lofty sentiments of the enterprise, and can not get back to the LED industry smile return. In 2011, affected by the economic downturn and the rapid expansion of production capacity and other factors, LED enterprises "closures", "attracted countless heroes jingzheyao".

The development of LED industry is a kind of rational market behavior. As a profession