LED industry breaks in addition to the amount of quality

At present, for the Chinese lighting industry, many companies focus on development channels, neglecting management optimization, and paying insufficient attention to the brand image and quality of the products. In addition, there are many types of lighting products and the market is large and complex. Low barriers to entry into the market result in a low concentration of the industry as a whole. In this context, companies should instead focus on “quantity” and “quality” while using “channels as the king”.

A company was founded in 1995. In 2000, the headquarters moved from Wenzhou to Zhongshan, and has its own production base in Fujian and Jiangxi. A company is a second-tier commercial lighting brand, established more than 2,000 dealers and distribution outlets nationwide, of which more than 800 product stores. Annual sales of 270 million yuan, domestic sales are involved, the export sector mainly in Jiangxi and Fujian two major production bases, mainly exported to Southeast Asia, the Middle East and South America and other emerging markets, sales of 50 million, and Zhongshan production base mainly to LED plate the Lord.

LED lighting started in 2008, experienced a hot period in 2010 and 2011, and then became rational in 2012, and showed steady growth in 2013 and 2014. Correspondingly, A company took advantage of the original brand's influence, re-optimized the channel, trying to use LED lighting to become the first-line brand camp for LED lighting applications.

First, channel layout, product first

The rise of LED has prompted many traditional lighting companies to step into the transitional tide. Business licenses bear the brunt of companies. First-tier companies such as NVC and Sanxiong, and second-tier brands such as Jiamei, Sidon, and Pinshang have used LED brand precipitation and transformation for many years, many of which are in transition. In the meantime, A is even more hurried, while A company has its own ideas and formulates the LED trilogy strategy:

The first step: to start construction of LED production line in 2010, to gradually transform the manufacturing advantages of traditional lighting into the field of LED lighting; Step 2: Establish LED R&D centers and laboratories in 2011 to learn LED lighting technology experience; in 2012, integrate products Line, began to shelf LED lighting products. The third step: In 2013, we focused on the overall layout of the market and shaping the brand. In 2014, we optimized channels and set up an operation center to optimize channel management and expand brand influence.

In early 2010, A company began to get involved in LED lighting, in 2011 related business income of 32 million yuan, accounting for 13.4% of the company's lighting business revenue, this figure has risen to 30% by the end of 2012, sales reached 78 million yuan, This year, more efforts have been made to promote the channel. It is expected that the LED business revenue will double by the end of the year to about 150 million yuan.

At present, in the field of LED interior lighting, the growth of commercial lighting is the fastest. With the gradual improvement of consumer awareness, the home lighting field will be another main battlefield for A companies. When the price of LED lighting is only 15%-20% higher than that of traditional lighting, market conditions will transition from policy support to the natural acceptance of the market. Now it is time for this.

It is understood that company A divided its business into foreign trade (energy-saving lamps), LED lighting and electricians. In 2010, it established the Foreign Trade Division and the Electric Power Business Unit, established a diversified product operation platform, and supported the LED Business Division. .

Ten years of brand precipitation and diversified operations such as OEM exports support the rapid transformation of LED companies and the elements of channel upgrades. The current project-based orders, as well as export orders for energy-saving lamps in Jiangxi and Fujian, support a huge transformation overhead. In the coming years, the company will also increase investment in capital, equipment, technology reserves, marketing and other aspects.

Second, add dealers

In the era of LED lighting, the instability of product solutions, the danger of inventory devaluation, the surge in competitors, and the sluggish market have caused many dealers to fall into unprecedented confusion in operating profitability and choosing brand cooperation. In this regard, A companies continue to do "additions" to distributors in product categories and channel services.

In the traditional lighting era, commercial lighting has NVC, Sanxiong, Kamei, Sidon, Pinshang, Mingpai, etc.; home lighting has Op, Hongguang, Liang A, Ao Keshi, etc., and each company's positioning is established. In the LED transformation, A company made a complete adjustment of the product line, in addition to the original commercial lighting products, but also to do home lighting, and to form an overall concept of stores, the reasons for the following two points:

At the product level, traditional lighting fixtures are led by light sources. The light source determines the specifications of the fixture. The 10-watt energy-saving lamp determines the size of the downlight, while the LED determines the light source, and the 30-watt fixture has its light source type. Some light source, surface light source, etc., the product is in the fusion phase.

At the merchant level, the wall of traditional commercial lighting is very rich, but the ceiling is neglected; while the home lighting ceiling has rich grades, but the cabinet wall is not well laid out. Standing at the operator's point of view, spending the same amount of money will surely hope to maximize the space and hope that more groups will come in. Whether it is home, business or light source, it can meet consumer demand.

With diversified consumer demand and diversified channels, it is difficult for dealers to survive and develop in a single sector such as retail, wholesale, or engineering, as they did in the past. In the survey of channel providers, in the sales model in which business A found businesses valued, e-commerce accounted for 30%, lamps and building materials market accounted for 20%, engineering channels accounted for 15%, and designer channels accounted for 10%. To this end, last year began to set up a dedicated team to promote the main brand, supplemented by transactions. At present, it mainly assists merchants in setting up and managing e-commerce platforms, while businesses can only enjoy a service fee of 1,000 yuan and can enjoy tens of thousands of yuan of service.

In addition, company A also set up the project department in each regional office, assisted the companies with project resources to give the plan, and contacted the technical service department of the headquarters to manufacture the products according to the requirements of the project party. During the process, everything was free of charge. Yes, businesses still enjoy sales revenue, while manufacturers have manufacturing rights.

Third, to the company to do subtraction

"Traditional lighting input and output, LED lighting overall layout" is the basic strategy of A companies. At present, the country has established more than 2,000 dealers and distribution outlets, of which more than 800 product stores. Although there are channels and brand foundations, A companies have encountered many problems in specific operations, such as disorderly channel management, low product matching, and chaotic supply chains. For this reason, A companies started to “subtract” themselves. .

In order to cut into the LED market as quickly as possible, in order to deploy the LED store system, company A has to develop new channels in addition to the existing channels. In addition, the new channel system implements “do nothing” and separate management. There are nearly 500 dealers, of which less than 200 dealers can produce long-term benefits. Due to the fact that the regional market is extremely low, many dealers do not make money, lose confidence in the brand, and change to other brands the next year, which is very fluid. In addition, the cost of management of A company has increased year by year. As a result, this year the company drastically cut down channels, cut down some low-sale merchants, set up more than 20 operation centers nationwide, and directly connected with the headquarters, re-planning and integrating channels, optimizing channel management, and expanding brand influence. Although this has negatively impacted existing dealers, the cost of management has fallen, and it has inspired the enthusiasm of operators and is beneficial to long-term business operations.

In terms of products, after several years of adjustment, the revenue ratio of LED products will surpass the traditional products this year. At present, nearly 300 LED lighting products have been introduced. The diversification of products has also brought a lot of troubles to A companies. In the selection of LED lighting products, company A has its own advantages, preferring mainstream products that are suitable for retail outlets of specialty stores, such as LED downlights, LED spotlights, and LED ceiling lamps; secondly, LED lighting products suitable for hardware distribution channels are selected. Electrical switches, such as bulbs, T5, T8, row plugs, etc.; as for professional products are issued to other manufacturers OEM. By choosing stereotyped products as the basis for scale-up, the cost can be reduced, and at the same time, dealers can concentrate their efforts on product management.

In the supply chain, last year, A companies had more than 70 suppliers, of which sizes were different, with large ones reaching hundreds of millions of dollars, and smaller ones with more than 100,000 yuan. Due to the small quantity, the suppliers have no money to make, naturally not active, the service is not in place, and some even have regular delivery delays, which brings a lot of trouble to the company's production. This year, A companies have integrated the original supply chain, leaving only 15 core suppliers, and their enthusiasm has also increased. They are willing to take the initiative to cooperate with inventory stock preparation and production adjustment.