The Lighting Market Is In A Strange Circle Aladdin's Innovation Model Opens Up A New Situation

- Jul 24, 2019-

Under the new normal, a large number of outstanding brands and enterprises in the LED industry have also risen rapidly. On the one hand, the development of technology has lowered the threshold for the manufacture and production of LED products; on the other hand, the “price war” led by industry giants has caused the direct impact of the LED market to enter the era of low profit. And the "butterfly effect" of the lighting industry continues.


The low profit of the products and the impact of e-commerce have caused the physical store to fall into a dilemma; the inventory backlog and the capital load have caused the manufacturers to close down; while the industry giants have taken the opportunity to speed up the pace of mergers and acquisitions.


Therefore, despite the big environment, the State Council’s revised action plan “China Zhizhuang 2025”, which is the government’s strategy to implement the manufacturing power, shows that China’s lighting products have great potential and the market capacity is tens of billions, but in fact, the current LED market There are quite a few "sad sorrows and sorrows".


Reduced profits and overcapacity, forcing companies to face transformation


Zhongshan Guzhen, the famous lighting capital, lighting products account for 70% of the national market share. Some time ago, CCTV Finance Channel broadcasted the "Report from the Frontline of Innovation" series of "Village and Town Breakthrough" series, the first program focused on the operation status of Zhongshan Guzhen lighting store in Guangdong. Among them, Shili Deng Street, once famous in China and abroad, is no longer the scene, and the loss of existing stores has become the norm.


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Respondents said that due to the low technical threshold, enterprises flooded into the LED industry and expanded blindly, resulting in fierce market competition. The gross profit margin of products at all ends of the industry chain fell sharply. This has led to a lack of confidence in merchants and a choice to change careers.


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According to statistics, in the first half of 2015, there were 579 cumulative loss-making enterprises in the national LED lighting industry, with a loss of 22.18% and a loss of 2.7%. Small businesses are gradually being acquired, and companies with low technology content are largely eliminated. Statistics show that in 2015, the domestic LED M&A amount reached 42 billion yuan, a year-on-year increase of 600%, while in 2014 this figure was only 6 billion yuan.


Some enterprises have begun to transform into e-commerce or foreign trade, which is certainly two ways, but for the new SMEs, it is also no small challenge. SMEs often do not have enough funds to open up overseas markets; while e-commerce platforms sell more products to individuals, and target customers are units, organizations, institutions or engineering companies.


Foreign brands are eyeing the Chinese market


Just as domestic companies have turned their eyes to the international market, foreign brands are equally eyeing the Chinese market. Although the downstream lighting product market has been firmly occupied by state-owned brands, the production technology of the upstream and midstream products is still controlled by international brands.


According to Boss data survey, the top ten brands of Chinese lighting fixtures in 2016 are Philips Lighting (Netherlands), Op Lighting, Panasonic (Japan), Foshan Lighting, NVC Lighting, TCL Lighting, Huayi, Osram (Germany), Midea Lighting , Oduo. Among them, foreign brands accounted for three seats, while industry giant Philips Lighting is at the top of the list, such as Cree (USA), Yiguang (Taiwan), and Nichia (Japan) are also very active. It can be seen that international brands are lighting in China. The market still occupies a certain position. In addition, some international high-end lighting brands are also waiting to enter the Chinese market with their technological advantages and long-standing brand history.


Online and offline integration is the trend of industry development


In the face of fierce competition, Liu Jun, the general manager of Aladdin Mall, the largest lighting e-commerce platform in the industry, believes that “the integration of online and offline interaction is the future development trend of the lighting industry. For the industry situation, we will Create an 'Aladdin VIP model' and help the traditional enterprises and stores transform through the 'Aladdin VIP flagship store' strategic plan, and deepen the domestic and international lighting market."


According to industry observations, in addition to home lighting products, commercial lighting, industrial lighting, landscape lighting and other engineering products are purchased in bulk, and lighting products are often customized according to the needs of the project. Based on such product attributes, lighting products Purchases need to be implemented offline, and online is more of a product display, and sales are only a small part.


“Aladdin has launched the 'Aladdin VIP model' based on in-depth understanding of the industry and rich experience in platform operation.” General Manager Liu Jun introduced that this model includes “One is to build the Aladdin VIP network (www.aldvip .com), to create the "Internet +" leader in the lighting industry, and form an integrated display trade and entrusted procurement system with Aladdin's international and domestic offline flagship stores, providing brand-based strategic cooperation customers with "brand + design" and "brand" One-stop trade solutions for refined Internet services such as + Engineering, Brand + Certification Testing, and Project + Finance.


The second is to open an Internet + offline refined trade and experience platform - Aladdin VIP flagship store, corresponding to the online VIP trading platform, opening offline flagship stores and experience halls in international and domestic important cities and regions. During the Guangzhou International Lighting Exhibition this year, the first Aladdin VIP flagship store, the exhibition experience hall will be unveiled at Hall A58 in Hall 1.1, which is the largest booth of this exhibition. We will bring together 30 high-end lighting brands at home and abroad to present a “product” feast for the industry. At that time, industry friends are welcome to come to the site to share new value platforms, explore new business models, and promote new opportunities for cooperation!"


The lighting industry has entered the era of meager profit. For the people in the lighting industry, “this is the best era and the worst era”. Because of the advent of an era, although there is a crisis, it often contains a bigger turn. Enterprises should have a deeper understanding of the development of the industry and seize the opportunity. Aladdin looks forward to leading you through the transformation of the times.


On June 9-12, during the 21st Guangya Exhibition, Aladdin set up the first Aladdin VIP flagship store in Hall A58, the largest booth of the exhibition. The exhibition experience hall will showcase 30 high-end lighting at home and abroad. Brand products, and share the Aladdin VIP network + offline flagship store innovation model to the industry, look forward to sharing new value platforms with the industry, explore new business models, and promote new cooperation opportunities! Welcome to visit the site!