LED overcapacity is a relative phenomenon LED industry needs to regulate

In 2016, as the first year of the “13th Five-Year Plan”, it has quietly passed through one-third. According to the first-quarter performance report released by major listed companies in the near future, the profitability of most LED companies in the first quarter There have been different growths, and the dominant enterprises in the LED industry have ushered in the “industry spring”, and the overall industry boom is expected to continue to pick up.

Looking back on the past 2015, under the new normal of the global economy facing deep adjustment and rebalancing, China's LED lighting industry has also entered a period of deep adjustment and continues to mature. In this process, the market competition is becoming increasingly fierce, the homogenization of LED products is serious, and the overcapacity is serious, resulting in the price space being repeatedly forced to compress. The whole industry inevitably experienced a baptism of “price war”.

Overcapacity is a relative phenomenon, LED industry needs to be standardized

Pang Guiwei, chairman of Shenzhen Tongpu Technology Co., Ltd. (referred to as "Tongpu Technology") said in an interview that overcapacity in the LED lighting industry is a relative phenomenon, mainly due to overcapacity of inferior products lacking quality assurance, resulting in "bad currency expulsion" In the case of good money, the market share of LED products with reliable quality and high cost performance is very low. At the same time, he believes that the domestic economic environment is in a period of adjustment, and the LED demand potential of second- and third-tier cities has not yet been truly released.

With the maturity and progress of technology, the price reduction of LED products is an inevitable law for the development of electronic products, which is a normal phenomenon. The reason for the abnormality is that some unreliable informal LED companies sell low-quality products at low prices, resulting in increased market low-price competition.

Every industry will experience germination, development, growth, decline, and innovation. This is the law. As long as there is market-level inspection and management guidance, an industry can continue to develop healthily. Just like when farming, some scorpions are hidden in the seeds. When the roots sprout and mature, the farmer uses the correct guidance to distinguish the scorpions and burn them.

“Not only the LED industry, but the biggest problem in many domestic industries is the lack of relevant industry standards and norms, leading to disorderly competition in the market and even irresponsible vicious competition. Just as there are no standard operating instructions for product manufacturing, even It is a different production line of the same factory, and it can't produce the same quality products.” Pang Guiwei said.

Pang Guiwei pointed out that emerging industries need the support and attention of the government in the initial stage to grow up faster. The government level should create a relatively fair competitive environment, help the industry to set the direction and set standards, and provide the environment and soil for appropriate enterprise development based on industry characteristics. However, we should grasp the degree, more administrative guidance and less administrative intervention, and the government's excessive support policies will inevitably lead to the situation of “destructive encouragement”, which is not conducive to the healthy development of the industry.

Capital involvement is conducive to industry integration and development

In the environment where the growth rate of the LED industry is gradually slowing down and the market competition is intensifying, many lighting companies are now rushing to apply for listing. In addition, LED listed companies have thrown news of restructuring and mergers, and capital movements continue, regardless of the industry. Still in all walks of life, people have turned their eyes to the LED capital market.

Faced with the rapid entry of financial capital into the entire LED industry, Pang Guiwei believes that the phenomenon of lighting enterprises getting together for listing has indicated the common phenomenon of lack of funds for manufacturing enterprises and lack of financing for small and medium-sized enterprises. Funds are hailed as the blood of enterprises, which is more prominent in manufacturing enterprises. The development of enterprises is inseparable from the thrust of financial capital. The involvement of financial capital is conducive to the integration and development of the LED industry, and will also promote technological progress. For example, internationally renowned manufacturing companies and technology-based enterprises will have strong financial capital support.

In addition to listing, the company can accelerate the development of the company through financing, and it can also bring social brand influence to the public company. At the same time, as a listed company, it will increase the trust in the user's mind and benefit the company's market expansion. It is believed that with the increase in the number of listed companies, the influence of this group of listed companies in the lighting industry will increase and become the dominant force.

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