Maple Yongming: ODM template for LED lighting

[Source: "High - tech LED - Research and Review" November issue reporter / Tang Guirong]

Most people want to make a brand from the inner imbalance and not convinced.

The huge gap between the ex-factory price and the retail price of the product makes the producers very unbalanced. A lighting factory in Shenzhen found a downlight, earning 10 yuan, but the brand can earn 80 yuan.

In fact, the factory, which can't help but feel impulsive, plans to make a good brand for its own products and go to the market in person.

However, the sorrow and joy story of the factory brand has begun.

A few brands with strong growth ability have stumbled through the survival period and entered the growth period uncomfortably; very few brands of high-quality varieties have gradually entered a mature stage; and most of the brands are not satisfied with the swords in the market. I still haven't seen the market, I hate the sand field, and finally retreat to the corner of the factory, no longer have the courage to show up.

China's lighting industry started in the early 1980s. After 30 years of development, it has grown from a small industry with an initial production value of less than 10 billion yuan to a large industry with an annual production value of 350 billion yuan in 2011. There are more than 10,000 large and small lighting companies, but there are only a handful of lighting brands that are truly recognized by consumers.

The reality is how many brands can China's LED lighting industry accommodate? Enterprises are tens of millions of yuan or even hundreds of millions of dollars invested in channel construction, in the end can bring much revenue to the company? How many LED lighting brands will there be in China?

At present, the brand has become a fashionable topic in the LED lighting industry. Both large enterprises and small enterprises are developing their own dealer channels, and want to create regional, national and even international LED lighting brands.

"The LED lighting industry has a broad prospect. Everyone thinks that they can dig a bucket of gold in this industry. Everyone wants to squeeze in." Dr. Zhang Xiaofei, CEO of Gaogong LED, admitted that often everyone always draws a circle for themselves and then puts I circle myself, and at the end I find that I am painting the ground.

Today, the ODM model has been forgotten by many companies. At present, most companies face a lot of confusion in building brands: “Increment does not increase profits, input and output are not balanced, how long can companies support?”

“At the time, there was only one belief that ODM was done for all companies with sales channels and market layouts.” Chen Kai, director of China Industrial Design Association, graduated from the Institute of Optoelectronic Technology of the Chinese Academy of Sciences, with a master's degree in optical engineering. After turning to specialize in industrial design, he worked as a manager of the Industrial Design Center at Xizi Otis Elevator Co., Ltd., and was engaged in the development of elevator industrial design products. In 2009, he was transferred to Xizi's newly established Zhejiang Xizi Optoelectronics Technology Co., Ltd. as the deputy general manager, responsible for the research and development of LED lighting products of the new company.

In 2011, with four years of research and development experience, Chen Kai founded a new company called Maple Yongming. "Although the profit of the ODM model is relatively thin, the market capacity of LED lighting is sufficient to support ODM manufacturers to become bigger and stronger."

After more than a year of experience, with its unique technical strength and with the ODM model, Maple Yongming has already provided LED lighting products and solutions for many companies with brands and sales channels, and has also developed a correct business. the road.

In Chen Kai's view, the result of LED industry integration is on the one hand the rise of brand manufacturers, and another trend is the formation of large ODMs.

Cost logic

"LED modularization is the mainstream solution for high-power lighting in the future." This is what Chen Kai has been talking about for the past two years. As an ODM manufacturer, you must first have a unique technology that no one can replace. "The biggest advantage of Maple Yongming is the modularization of LED street lights. We have solved the problem of LED street lamp cost, life, installation and so on."

After the baptism of the "Ten Cities and Ten Thousand Miles" project, the LED lights, the dead lights, short life and other ills have made many local streetlight management stations daunting.

Since then, increasing R&D investment has become a common goal for all companies that want to grab a slice of the LED outdoor lighting market. However, in Chen Kai's view, a company's independent research and development of LED street lamps, the cost of research and development is huge, and in the end does not necessarily produce actual benefits.

He calculated the account for the reporter: an LED street light enterprise, the annual investment in research and development needs at least 10 million yuan. If the company's sales scale can reach 50 million yuan in the first year, it is already very good. But even so, the company lost money in its first year. If there are ten identical companies, then the total R&D expenditure will be 100 million yuan.

"In fact, we will find that these research and development are repetitive labor, and everyone's results are not far behind. And each company in the process of research and development, will inevitably have to pay tuition, which also caused a huge waste of research and development costs." It is said that if the research and development of these ten companies has a professional technical service company to do, then as long as 20 million yuan can complete the previous research and development of 100 million yuan. “This street lamp company can save a lot of research and development costs and concentrate on opening up the market.”

At the same time, since the above ten companies adopt centralized procurement, the procurement cost can be reduced by at least 10%-20%. For the customer, this means that the cost of the LED street lamp product can be reduced by 10%-15%, which undoubtedly enhances the market competitiveness of the enterprise.

In fact, huge technology research and development costs have become the heart of the enterprise. For small businesses, they can't afford huge R&D expenses. For large companies, huge investment also increases the overall business risk of the company.

At the same time, the market price of LED street lamps is also rapidly declining every year, and the days of LED street lamp manufacturers are generally not good. According to the statistics of the High-tech LED Industry Research Institute (GLII), the price of domestic LED street lamps per watt was more than 30 yuan at the beginning of 2011. By the end of 2011, the price dropped to about 23 yuan per watt. This year, the price dropped to 13-15 per watt. Yuan or so.

In view of the blind spots in the LED street lamp market, in 2011, Chen Kai quickly set up a core technical team and applied for a number of LED street lamp module patents. At present, the first phase of the investment of Maple Yongming is 70 million yuan, while the investment in research and development accounts for 70%.

Strong behind-the-scenes supplier

The statistics of the High-tech LED Industry Research Institute (GLII) show that from 2011 to now, there are as many as 1,000 newly established LED lighting companies in China. Whether in the communications industry, home appliance industry, or in the traditional lighting industry, companies have entered the LED lighting market.

"As long as there is an order on hand, and then hire a technical director from a competitor, and then do some brand promotion in the market, you can set up an LED lighting company." Zhang Xiaofei said that this is the newcomer to most LED lighting industry. Habitual thinking mode.

Although the current LED lighting industry threshold is not high, but for Maple Yongming, this is a once-in-a-lifetime opportunity.

After making technical reserves and patent applications, this year, Maple Yongming began to be active among LED lighting manufacturers. "We just need to lay the brand of LED lighting ODM manufacturers. For the terminal brand, we will not touch."

Perhaps it is clear positioning and market recognition. The sales of Maple Yongming jumped from 2 million yuan at the beginning of this year to nearly 13 million yuan in November, and won the brand OEM of several large-scale lighting companies in China. business. "According to the current forecast, our sales this year can reach 60 million yuan, and our target for next year is 120 million yuan." Chen Kai said with confidence.

For Maple Yongming, the goal is far more than that simple.

"The only thing we have to do is to do a good job in R&D and then promote our technology in the industry." For the survival of Maple Yongming, Chen Kai borrowed from the LCD TV industry. “Most of the people we know in the past are brand TV manufacturers, but in fact, TV manufacturers have fewer suppliers than brand manufacturers.”

When the industrial structure is gradually clear, nothing more than a few brand manufacturers and some suppliers with technical content. Chen Kai said that Huapu Yongming just wants to be a link in the middle of the LED industry chain and become a strong supplier behind the brand manufacturers.

For the future goals, Chen Kai does not hide his ambiguity about the capital market. “But behind-the-scenes suppliers have thin profits, but ODM's plates are enough to support enterprises to sprint IPOs.” Currently, Huapu Yongming has 30 R&D personnel, invested millions of yuan to establish a high-end experimental platform, and has internationalized LEDs in Hangzhou. Lighting ODM OEM production base.