China's Lamp Exports Face Trade Protectionism

The first time I saw Zhu Jianrong in Los Angeles, this “post-70s” Taizhou man left a deep impression on us—it was not high, but it was very passionate to speak and do things. As long as it talked about the “light,” he could pull it. You said last night.

If someone wants to shoot a film that Zheshang is trotting in the United States, Zhu Jianrong's experience can definitely be used to write a script. Since 1999, he has expanded his lighting business in the United States. At the most brilliant time, he was the fifth largest Christmas light manufacturer in China with the largest sales volume in the world. The market shrinkage brought about by the economic crisis after 2007 has forced him to “upgrade” the road to industrial upgrading – focusing on high-efficiency and energy-saving LED lights. While his product quality is booming, the U.S. government’s “protection” of domestic companies has brought him new trouble...

【Initial United States】

Ripping the US market with a price and service

Zhu Jianrong was born in the lamp family. Zhu Jiemin, the father, is a typical representative of Zhejiang merchants—“transforming” from the status of middle school teachers. He started from scratch with his friends and created the Jiaoguang Group, which now has more than 4,000 employees. After graduating from university in 1995, Zhu Jianrong was sent abroad to "accumulate experience" and started the Christmas lantern export business. After several years of hard work, he has been very successful in Brazil and Europe. In 1999, their eyes were locked in the United States.

The United States is the largest Christmas light market in the world. However, before 2000, this $1.2 billion cake has been monopolized by the other four companies and the top five importers in the United States. “The four factories were truly capable of product development. At that time, the only advantage for us was that they were cheap. At that time, a bunch of Christmas lights cost less than US$2, and those factories offer US$3.8, and we quote US$2.7. Zhu Jianrong still remembers that, because of its low cost and low price, U.S. buyers thought they were mistaken when they first quoted prices.

Over 93% of the US Christmas light market share is monopolized by the top seven supermarket chains in the United States. If you want to hang the Chinese Christmas lights to Americans' homes, you must first enter the mainstream American chain stores. K-Mart (Kmart Supermarket, once the largest discount retail supermarket in the United States) was Zhu Jianrong’s first US customer to talk about.

"I talked with them all three years. They said that you may not be cheap and we will buy with you. The key is to cultivate trust. At that time, Target (the second largest supermarket chain in the United States) has just set up an office in Shanghai, from China. We selected us among the 11 factories, mainly because we feel that we can be competent regardless of capacity, configuration, or understanding of the US business rules. We really do Chinese supply American service (made in China, American service)."

In 2002, Zhu Jianrong finally received a small order of $650,000 from Target Supermarket. After this Easter holiday was successfully completed, in 2003, Zhu Jianrong grabbed a $4.7 million Christmas light order. By 2007, each year, Light had shipped more than $10 million to Target as its core supplier.

The $1.2 billion Christmas light market was finally torn apart by this persistent Taizhou businessman.

【Bigger and stronger】

"Made Foreign Ocean" Creates Target's Lowest Return Rate

The $4.7 million order was very beautiful, and 7.5%. The return rate is also the best one for Target. Because of their persistent pursuit of product quality and continuous development of new products, they have been Target's premium suppliers since then.

After entering the mainstream chain stores in the United States, Zhu Jianrong found through the analysis of the US market that old products are “bone”, and those fashionable new products are “meat”, and some new products even have profits of 200%. Zhu Jianrong understands that if one wants to “eat meat,” it must cater to the “appetite” of Americans, and the key is to break cultural barriers.

“When Chinese people sell Christmas gifts to the United States, they will first have a question. Do you Orientals really understand our culture?” said Zhu Jianrong. They only adapt their designs to local conditions and adopt foreign strategies to design adaptations with American designers. American-flavored products, “For example, the American Christmas is not the same as in Europe, and Americans like Santa Claus and deer are not the same as Europeans. Europeans like elk are small and delicate. The ones that can be placed on the windowsill are very traditional and lightweight, and the Americans prefer deer and style. The American designer Santa Claus and deer are changing every year. This year, they will be glittering and shining next year. Glittering, vintage retro. The colors change every year. The most popular last year was the champagne Christmas."

Due to its new design and high quality, Zhu Jianrong has become one of the most important suppliers of Target Christmas lights. This also helped his company become the fifth largest Christmas light manufacturer in China with the largest sales volume in the world.

After the economic crisis

Sharp decline in the market forced a successful transformation
While in the United States, Zhu Jianrong deliberately took reporters and other friends to his warehouse and turned around. At that time, only 3 weeks away from Christmas, but the Christmas "lights" in Los Angeles residential areas are not clear. “The people who hang Christmas lights in these two years seem to be getting less and less. At this time, the mountains were all one and there was competition between the neighbors. If the prices were not good in these two years, there would be no inventory at all in the warehouse. Hey, you're holding a box of homes.” Zhu Jianrong said that in 2010 he was already a local importer of a few Christmas lights in Los Angeles (the only supplier in several supermarket chains), but sales were still 40% less.

In fact, the crisis began in 2007. “After the financial crisis, the market demand dropped by 40%. The appreciation of the renminbi and the rise in domestic labor costs have also brought us a lot of pressure. It feels like our business has entered the severe winter in 2008.” Zhu Jianrong said This pressure forces them to upgrade their industries.

As early as 2007, Zhu Jianrong and his father Zhu Jiemin went to Shenzhen for a high-tech exhibition. The latest LED chips at the Korean booth attracted their attention. Upon returning to the United States, Zhu Jianrong began to conduct market research. As a result, he found that LED could go this way.

"The benefits of LED bulbs are energy saving and long life. The life of ordinary bulbs is 5,000 hours, and the life of LED bulbs is 50,000 hours. If the world's bulbs are replaced with LED bulbs, the world's power plants can be switched off by 40%. The main problem is technology, because the technology of LED chips is mainly monopolized by big international giants. Therefore, the price of LED is high in foreign countries."

The most exciting thing for them is that the U.S. government has decided to replace ordinary street lamps with LED street lamps one after another. “There are 70 million street lamps in the United States, and each street lamp costs 1,000 U.S. dollars, which is the market of 70 billion U.S. dollars.” Thus, the main LED The street lamp has become the new direction for Zhu Jianrong’s corporate transformation.

[now and future]

Frustrated U.S. GM, but still firmly believe that tomorrow

Do not underestimate an LED street light, inside the knowledge can be great. In Zhu Jianrong’s office in Los Angeles, he excitedly unscrew the screws of the street light box and introduced us to the “internal structure”.

"The design of this light box is already the third generation. The first designs of light boxes are relatively large, and several lamps are connected. You look at this design, each lamp is independent. , There are many grooves. This will not only help to heat, prolong the life of LED bulbs, but also not afraid of rain. If the lamp is broken, it can also be replaced individually. "With its own research and development of LED lights, Zhu Jianrong like a proud Parents. At present, his LED lights have been put into the US market, and he also participated in the street show organized by the Los Angeles Municipal Government.

In fact, the Chinese LED lights have to enter the US market and the competition is very cruel. First of all, we must have high-tech support and be able to pass the US market certification. The design requirements of traditional American street lamps are very demanding. The light standards are filled with hundreds of pages, and even the color of the tapes in the light boxes is stipulated. It is really not easy to find out. Zhu Jianrong invited the people of the Department of Optical Engineering of Zhejiang University to design together and has successfully developed a street lamp that has passed the UL standard certification.

Second, after-sales service is also a very important part. The street light, if sold to the city government, will need to provide a 5-year warranty. The two largest mountains in front of Zhu Jianrong are the leading companies General Electric (GE) and Philips. GE is the largest producer and supplier of traditional street lamps in the United States. Many of the design standards for street lamps in the United States were developed by GE.

In November last year, the city of Los Angeles held a bid for the replacement of 6000 street lights. Zhu Jianrong and GE, Philips and other large companies have come forward to face each other. “The UL standard street lamp we successfully developed was not inferior to GE's street lamp in terms of device and design, and the price was much cheaper. At the time of the show, everyone saw it.” Before the bidding, Zhu Jianrong was confident.

Unfortunately, he ended up losing to GE. The news from the industry is that it is not that Zhu Jianrong’s LED lights are not good enough, but that the US government is more inclined to protect local companies. “It is not enough to do business in the United States and compete with these big crocodile. It is not enough to be better than them. We have to continue to work hard to continue to develop new products.” Zhu Jianrong encouraged himself. Currently, their street lights have been selected by the California Department of Transportation, and they will soon be installed on some of the highways in Los Angeles for testing. It is believed that one day, Zhu Jianrong will drive his streetlight into the mainstream market in the United States.