8 Strategies for Coping with the Downturn of Lighting Enterprises

Tag : Lighting

The lighting industry in the busy season has suffered a "cold current".



September and October should be the traditional peak season of lighting industry, but the entire lighting market was as sluggish as the pan-home industry in the first nine months of 2018. 


There are two main reasons: on the one hand, the macroeconomic growth rate has slowed down, the financing environment has tightened, loans and purchase of real estate have been restricted, market demand has shrunk significantly, and the real economy has become more difficult. On the other hand, the number of manufacturers in the lighting industry has grown so fast that the competitive environment of oversupply is fierce, the terminal distribution channels are sparsely populated, the rigid costs are rising, and the homogenous price competition is fierce.


Recently, the fluctuations in the economic environment of the international market have also been relatively large, resulting in different levels of influence on production capacity and profits of export-oriented enterprises.


Under the current macro-level situation of deepening supply-side structural reform and green capacity reduction, the development direction of the whole industry in the future will develop from quantity advantage to quality advantage, i.e., products will shift from low added value to high added value, and enterprises will develop from labored-intensive to technology-intensive, the industry will shift from extensive to intensive.


The survival space of many small and medium-sized enterprises has been squeezed, which is the integration process of an industry to eliminate inefficient production capacity, inferior products, low-cost competition, and low-end enterprises.


With the improvement of the lighting product standardization system and the deepening of the production automation process, it is possible to accelerate the standardization and intensification of the entire industry.


At the same time, with the increase of industry concentration and intensification, the cost performance of lighting products will also increase rapidly, and the penetration rate of new light source LED lighting products will also increase year by year. According to data from third-party professional organizations, the global LED lighting penetration rate reached 40% in 2017, and will continue to accelerate in 2018.


In addition, LED niche markets such as LED lights, LED plant lighting, LED smart lighting, LED small-pitch display screen will also maintain rapid growth, LED emerging applications Mini LED will also usher in industrial applications to improve the added value of LED display and backlight. 


8 countermeasures that might help the lighting companies to pull through

Take Zhongshan as an example, in early September, Zhongshan Semiconductor Lighting Industry Association released the "Second Quarter 2018 Zhongshan LED Industry Operation Monitoring Report", saying: due to the overall economic downturn at home and abroad, the LED output value was 16.75 billion yuan in the second quarter of 2018, with a year-on-year increase of only 3.7%.

From the research report, the editor screened out the solutions mentioned by 100 companies, and sorted out 8 strategies as follows to provide some reference and help for the operation of lighting enterprises in the second half of the year and even next year.


8 Strategies for Coping with the Downturn of Lighting Enterprises


  1. Ensure product quality, promote intellectualization, quality, and standardization

On the basis of rising product quality, lighting companies have promoted intellectualization, quality, and standardization operations to fully develop domestic market (including mainland, Taiwan, and Hon Kong) and overseas market, such as Japan, U.S., Singapore, Saudi Arabia, and Indonesia.


8 Strategies for Coping with the Downturn of Lighting Enterprises


  1. Introduce a home intelligence system, open a new department and increase new profit points

In view of the market demand, lighting enterprises are gradually inclined to simple linear lighting and intelligent lighting. In the second half of the year, linear lighting products will be developed, home intelligent systems will be introduced, and new departments will be set up to for intelligent lighting development and sales.


8 Strategies for Coping with the Downturn of Lighting Enterprises


  1. Sort out internal management, the channel stretches to the third-tier and fourth-tier cities

Lighting companies pay attention to the optimization and improvement of overall production performance, including the use of automated production line layout, production process optimization and improvement, personnel training, etc. According to the arrival of the overall domestic consumption upgrade, the market share of the third-tier and fourth-tier cities will continue to increase in the second half of the year.


  1. Reduce costs, improve design, and seize the large circulation market

Customers are sensitive to price, and the demand for low price and large circulation products is increasing. In the second half of the year, lighting companies can focus on developing large circulation products, improving design and reducing costs.


  1. Enrich product lines to meet one-stop consumer demand

The terminal customer's brand awareness and quality requirements have improved, and they have higher requirements for the products. Thus, a rich product line can meet the consumer demand for one-stop products.


  1. Optimize product systems to provide a brand-new total solution

The demand for outdoor lighting products has increased and demand exceeds supply. Outdoor lighting companies can optimize the original production process, focus on landscape architecture and real estate projects.


  1. Develop innovative products to seize the Blue Ocean Market

The market is gradually favoring high-luminance, energy-saving and environmentally-friendly LED lighting products. Customers pay more attention to design aesthetics and harmonious integration. Lighting companies can develop innovative products in sub-segments such as student market and business high-end market.


  1. Transformation from visual lighting to diversified atmosphere lighting, focusing on the promotion of lighting ecology

The diversified lighting design and lighting ecology of the market have changed significantly; the lighting companies can integrate the light, ambient light and space, light and color, light and materials to create the "light" environmental artistic effects into the interior design.



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