Why is the competition in the LED industry like the "Warring States Period"?

    It is said that the domestic LED lighting industry is in a period of rapid transformation and full of variables. It is difficult to describe the good or bad in one sentence. It can be said that this is the best period, because LED lighting is a continuous and reliable The high-efficiency and energy-saving national strategic development industry has shown explosive growth. The industry has reached a market scale of nearly more than 400 billion yuan, and has achieved rapid growth of more than 40% every year. The market prospects are broad.

    On the other hand, this is another bad period, because the market competition is too fierce, and the competition order is chaotic, large and small companies fight together in chaos, companies are constantly being eliminated, some bosses lose contact, or Fleeing with money, leaving a mess; but at the same time, there are a steady stream of new companies being established or interbanks joining the competition. The whole situation is a chaotic, anxious, and tossing competition state. The law of the jungle of survival of the fittest and the weak is vividly reflected here. .

    Therefore, as far as the current competition pattern of the entire LED lighting industry is concerned, in summary, this is the "Warring States Era" of the LED lighting industry.

    In order to summarize the Warring States period of the LED lighting industry, we can review the historical situation of the Warring States period at the beginning. The Warring States Period (476 BC-221 BC) was another era of separatist rule of vassals since the Eastern Zhou Dynasty. There is no clear boundary with Chunqiu in history. It is only in accordance with historical practice, with the division of three families as the starting mark, and the end of Qin's unification of the six kingdoms in 221 BC.

    During this period, China’s situation has changed. Many small and medium-sized princes countries have been annexed. The remaining Qin, Chu, Yan, Han, Zhao, Wei, and Qi kingdoms became the main princes of the Warring States period, known as the "Seven Heroes of the Warring States" period. ". In addition to the seven heroes of the Warring States period, there are also great powers such as Vietnam, Pakistan, Shu, Song, and Zhongshan. There are still small countries such as Zheng, Wei, Dongzhou, Lu, Teng, Zou, Fei, etc., but their strength and influence are far inferior to the Seven Heroes of the Warring States Period. They can only survive in the cracks of the powerful nations, and they will eventually be destroyed by the Seven Heroes.

    The annexation wars of various countries have reduced the number of princes, the territory of the winners has increased, the population has increased, and the wealth has also been concentrated. The wealth of land and population originally scattered in the hands of the princes was concentrated in the hands of a few princes. The world has been integrated from hundreds of small countries to more than ten large entity countries. The original strategic buffer space no longer exists, and the major countries have to face a pattern of direct and brutal competition.

    The concentration of resources has increased the scale of wars among countries, and the intensity of wars has also risen sharply. In the constant fierce attack between each other, how to survive the competition, and how to make the country rich and strong has become the primary consideration of the decision-makers of all countries. Summarizing the characteristics of the Warring States Period, there are mainly one: frequent wars and social turmoil. Especially during the war, it was really a melee situation of "the country has no peace, and the year has no peace", "the country has no diplomatic relations, and the soil has no master".

    In order to maintain their own survival and expand the power of each country, the monarchs have successively become kings and dominate one side. On the one hand, it strengthens centralization, reforms to be strong, and strengthens armaments; on the other hand, it frequently strives for the "collaboration" and "continuity" of other countries in diplomacy.

    The current domestic LED lighting industry is also in such a fierce integration process to accelerate the "snatch and annex" and "rich the country and strengthen the army." More and more enterprise groups integrate capital, technology, channels and other resources through listing, reorganization, mergers and acquisitions, and group alliances, etc., and continue to grow stronger. Pond, fierce fighting, by annexing small princes, dominates one side, and finally ranks as the "Seven Heroes of the Warring States"; on the other hand, more and more small and medium-sized enterprises are like small princes living in the cracks, facing the pressure of strong soldiers. , Unbearable for a war, and eventually went bankrupt due to broken capital chain, lack of technology and channels, high cost and other reasons. The boss had to "defeated and fled", or was acquired by other companies.

    The "intensity" and "chaos" of industry competition are still the same as the frequent wars in the Warring States period. This is a battle without gunsmoke. At the same time, the progress of this kind of war is not as full of shocking as the cold weapon era. Fighting cries of fighting, the clash of swords and swords, but price wars, channel wars, brand wars... various forms of competition in the lighting industry are constantly being provoked. The mentality of all entrepreneurs is "a room between talking and laughing." , 樯橹 flying in ashes", or for a time "the wind is rumbling, the grass and trees are all soldiers", it is estimated that only entrepreneurs have their own perceptions.

    We believe that this is the Warring States era of the LED lighting industry, and the chaos is mainly manifested in the following aspects:

    First, the number of enterprises is huge, and there is no monopolistic "overlord" enterprise for the time being. There are nearly 10,000 large and small companies in the entire LED lighting company, and the number is large, but the truly powerful companies are fewer, and those so-called well-known big-name companies, their LED lighting business can account for 1% of the industry’s market share The above are basically rare. What's more, there is no company that can form a dominance in the monopolistic market like state-owned enterprises in certain fields, and determine or influence the trends of the industry. This forms the LED lighting companies, no one can control or decide who, large companies have large companies, and small companies have their own single-plank bridges for small companies. Each has room for survival. Only in the market competition can one fight each other. High and low. This is consistent with the situation in the Warring States period that "the world has no owner, and the princes are invited to fight for hegemony".

    The second is the low threshold of industry technology and capital, resulting in chaotic competition. Due to the low threshold, it seems that "anyone can join the industry to participate in the competition." It is not necessary to have enough food, grass and weapons to be qualified for the battle or the battlefield. In other words, even with a stick and a hoe, you can have a confrontation and fight on the battlefield to your heart's content. This may sound incredible, but because of the lack of norms, standards, and strict management, this is the case in the industry.

    The production of an ordinary lamp hardly needs too high technical content; a small workshop can also produce batches of lamps without investing too much capital. Large companies can develop and grow, and small companies can also find room for development in the market. In the end, companies or individuals, whether they have technical capabilities, maintain good services, or have sufficient financial strength, are all mixed in the industry. The follow-up technical guarantee and improvement, effective service follow-up, etc. have become problems, leading to chaos in the market order.

    Third, the industry has not really formed a unified, standardized and enforceable standard. The phenomenon caused by this situation is that products that seem to belong to the same category should have comparable quality and price, but in fact, the technology, raw material quality, and process level are uneven, resulting in huge differences in prices. The pursuit of high quality and low price is the nature of consumers, making it difficult for high-quality, high-priced products to win a broad market, so the product market competition is at a low level. In the absence of a unified price standard, manufacturers can make a big fuss about prices, so price wars in the industry have been one after another. This is just like hand-to-hand combat on the battlefield, fighting chaotic and hand-to-hand combat.

    Fourth, many large and medium-sized enterprises in other fields cross-border. LED lighting has broad market prospects, and the capital and technology are low. Just like a mine rich in gold is discovered, everyone wants to come and dig. This has attracted more and more large companies with certain technological and capital strength to join the LED lighting industry across the border. For example, enterprise groups in the fields of home appliances, packaging, technology, energy, etc. have entered into LED lighting through independent business development or mergers and acquisitions of lighting companies. Lighting business, after all, different industries have different channel models, business models, and business ecology. The popularity of cross-borders has caused the development of the industry to deviate from the inherent normal development track, and the competitive situation has become fierce and complicated.