How to seize the 500 billion production value of the LED industry

Recently, Zhao Ming, Deputy Director and Secretary-General of Energy Conservation Service Industry Committee of China Energy Conservation Association, Wu Changjiang, President of NVC Lighting Holdings Limited, Xiao Guowei, President of Jinko Electronics (Guangzhou) Co., Ltd., and Chen Ronghua, President of Solar Rain Solar Group Co., Ltd., Shenzhen Senior Industry Industry Research Co., Ltd. President Zhang Xiaofei and other industry experts conducted in-depth discussions on the CHEMBA China Marketing Master Forum jointly organized by China Marketing Innovation Alliance and Zhongshan University CHEMBA project. According to the “Twelfth Five-Year Plan”, by 2015, the nation’s total LED output will reach 500 billion yuan, while the global lighting market will exceed 1 trillion yuan. How can Chinese companies take advantage of this big cake? Where is the market breaking point?

Mayors and markets must find

Weekly win: When it comes to energy-saving and environmental protection industries, everyone thinks more about policy support and government support than business strategy. Is the development of the industry looking for the mayor or relying on the market?

Zhao Ming: Both of these points are needed. In particular, building energy efficiency has an important market, namely, public institutions. This is a virgin land that has not yet been developed and is also a golden place. Because the potential of energy saving in public institutions is far from being tapped, building energy conservation, such as commercial hotel buildings, still has some room for marketization.

The green lighting of roads, especially street lights, is also a concern of many companies. Everyone thinks that this is a good area. However, in fact, the street lights in public institutions are the most difficult ones. The United States already has cities declared bankruptcy, so when companies choose to Comprehensively consider market demand and risks.

There are clear objectives and measures put forward in the Public Institutions Management Regulations, and there are also some policy safeguard measures. This provides safeguards for energy-saving companies to enter public institutions, but there are still many problems in the financial processing methods, including accounting and accounting. This is worth our attention.

Is it looking for the mayor or looking for a market? To find the mayor, the most fundamental thing is to find the market. What can I do for the mayor? The first is to cultivate the market, enjoy policies, and continue to develop. The energy-saving industry is a government-led industry. If there is no clear requirement for the energy conservation industry in the “Twelfth Five-Year Plan”, will the energy-saving industry market have such great potential? Obviously it is unlikely. However, for enterprises, the most important thing is to develop the market. In addition to the market cultivated by the government, we must continue to develop other markets.

Wu Changjiang: As the technology matures and costs drop, the LED era has come. Many people may still say that this market is difficult to do and business is more slick, but I think that in the next three to five years, this industry will be an explosive growth. Why? A large number of traditional light sources have to be replaced, and a large number of lighting locations in shopping malls, hotels, office buildings, and hospitals (etc.) have to be replaced, and economic and social benefits have been highlighted. In this great environment, how companies seize opportunities is something we must consider.

I think that the mayor and the market must both look for it; after the research (people) researches the results, they look for the mayor and the mayor pays attention to this industry, but the company (person) should not go to the mayor, but should look for the market. . The government took a piece of cake and everyone did not develop the company in accordance with the laws of the market but went to the mayor. The relationship could be opened up and the orders received could not be completed in a year. However, your current production capacity and team can only operate on a scale of one or two billion. If you take 10 billion (orders) back, you must invest and recruit. Three years later, the market changed, and the mayor changed jobs. At that time, you were forced to lay off your staff. The money you make may not even be worth the depreciation (cost) of the equipment. I do not want the government to intervene too much in the market. We should let the market naturally update, otherwise it will be a disservice.

Resource integration is the best way for the industry
Weekly Weekly: NVC has obviously started late in the LED field. Why did it not invest in the previous years?

Wu Changjiang: In the past two years, everyone has been excited about energy conservation and environmental protection, especially the LED industry. The global energy scarcity has made energy conservation and environmental protection a trend. However, as entrepreneurs and as entrepreneurs, we cannot use this concept to flicker leaders and consumers. We should know that this industry depends on energy? What is the principle? How to save energy? Where are the economic and social benefits? You must not seize this concept and deceive yourself. You not only fooled the leader, flicked the whole society, but also deceived yourself.

In the past few years, I did not do LED, but first to measure whether our technology is mature, product residue control is not down, whether the economic benefits can be produced, can bring social benefits. If we fail to do so, we will put it at the stage of theoretical research rather than rush to market. So a few years ago my strategy was to pay close attention to the LED industry, keep up with the situation, and attack at the right time.

In the past, the prerequisite for me to purchase LEDs from us was that, first, I could not use the brand name "NVC Lighting" and secondly, protect the quality. The government wants to purchase, I can offer it, but absolutely not push it. Because at that time, doing LED is energy saving, but not saving money, no economic benefits and no social benefits, the technology is not yet mature. There was such a joke that where LED street lights were installed, the crime rate on this road was particularly high, because after one or two months of installation, the crime rate became dark.

Last year, the LED industry developed by leaps and bounds, beyond everyone's imagination, technology is mature, and costs have dropped. It is imminent to talk about LEDs replacing traditional lighting sources. We must face this reality and be prepared.

However, the market environment now facing is very different from that of 20 years ago. It is not about planning, packaging, or creating a concept that can win the market. Today's corporate competition is the competition of comprehensive strength. It is not enough to have core technologies, but also constant innovations such as teams, capital, channels, brands, and management.

NVC LED is now in a period of rapid growth, will account for more than 50% of the total sales of the next year, this year is at least 30% of the share.

Weekly Weekly: How did NVC achieve this in the wake of the slow start?

Wu Changjiang: On the one hand, this industry is mature. On the other hand, we choose resources for integration and open up markets together with our partners. Last year, we cooperated with BDO Runda (Bundesder Runda purchased 20.08% stake in NVC). Many people talked about one another. In fact, we had no other purpose, there was no contact with the shareholders' dispute, just for the development of NVC. I am not only thinking about NVC's way out, but also thinking about the future of the entire industry. Only the integration of the industry, the realization of complementary advantages, and the sharing of resources can only lead a way out. At the same time, the achievement of the LED industry will not be more chaotic than the current situation.

In some areas, we do not need to repeat investment. This is unfavorable to the company and it is also unfavorable to the industry. NVC has the conditions and ability to invest billions of yuan in chip outsourcing, but once it is invested, on the one hand, it has to bear the risk. On the other hand, after I invest three years, it is possible that this industry has undergone great changes. Through continuous integration, we continue to fill in our own short boards and create a brand with the most comprehensive strength in the industry. This is our point of view.

What we want to compete is not domestic companies. The stage we face is the global stage. Our competitors are the very strong opponents of the world. Therefore, we must unite and complement each other with the advantages of resource integration.

Loss of brand brings equal opportunities

Win Weekly: Most consumers understand the LED lighting and energy saving, but few people can say a LED lighting brand. Is this business opportunity or crisis for the company?

Wu Changjiang: It is both a crisis and an opportunity. The crisis is that consumers have just begun to accept the LED, can already form a market, but some companies in order to short-term benefits, regardless of quality, which is a blow to the LED industry, just like when the energy-saving lamps were introduced at the same time, some companies are fuzzy The consumer's resolving power led to the promotion of energy-saving lamps for so many years. If everyone can adhere to brand awareness and insist on quality, they will soon come to the fore. This is another good business opportunity.

Chen Ronghua: After the listing of the A-shares last year, we raised funds and wanted to enter the LED market. We did market research, and a team of experts specialized in this. Later, we discovered that the water is really deep, and we still do the solar energy first. At that time, we felt that a person who was not involved in the industry would be positive and think it was a business opportunity because (the industry) did not have a (mature) brand and would be better involved. Later, it was not simple.

For LED practitioners, opportunities are greater than the crisis. When there is no brand in the industry, the power of marketing will be more important. At this time, if there is a good communication (method), it can be an opportunity to enter the hearts of ordinary people. I once said that in the era when there is no LED, Chinese companies have a hard time defeating Philips; but in the LED era, everything was disrupted. We do not know what brand of LED products to buy. This is a whole industry. opportunity.

Zhang Xiaofei: Whenever any innovative technology emerges, certain (will) people will cry and (someone) laugh, so it is absolutely a crisis for traditional lighting. Apart from the channels, traditional lighting has no other advantages. From a very simple technology to an e-semiconductor product, the gap is very large. It does not allow everyone to be vague and the competition behind it will be fierce. I think most of the traditional lighting companies will It is dead, but it is an opportunity for companies that directly enter the LED.

Weekly win: In the future, if any LED company wants to occupy the first brand in the minds of consumers, what should be done?

Wu Changjiang: Many bosses' perceptions of branding remain on the surface. They are trying to find ways to plan, package, advertise, and find brand endorsements. They do not pay attention to another point, namely customer loyalty. You can let others know you, but to make people believe that you are not easy, branding is a symbol of strength, not planning.

Chinese people like to take short cuts. If a company can do 20, 30, or even 100 years, it is a well-known brand, so sticking is very important. You may encounter many temptations in the process, but you have to control yourself. Don't take shortcuts.

The foundation is very important. If you want to build a building with a 100-story building, the first thing to consider is whether you have so much money and get your money ready. But with money, don't be busy building this building. It's easy to get an accident. Why? You have to ask yourself if you have a professional team, management, construction, and technology. With the team, the construction of this building still requires cement building materials; if it is built to the 99th floor, all the surrounding building materials are used up, and the same cannot achieve the goal. Therefore, we must consider the supply chain, and we must figure out why this building should be built. Is it self-use or commercial? If you are renting out, you must consider whether or not there are markets around you.

Chen Ronghua: Entering the LED industry, everyone's opportunities are equal, but if you want to become the leading brand in the LED industry, you must have an integrated global resource thinking, because there is no shortage of capital, no shortage of technology, and no shortage of markets. What talent is missing is the head that integrates these resources. What is missing is thought.

After 2008 LED applications began to rise, LED brand will certainly come out, but not necessarily now. Now all the LED light sources have heard good things. We have done relatively poorly in solving consumer demand. No matter who will become the leading brand in the end, it must solve the problem of demand from the perspective of the product.

Xiao Guowei: I think that (LED) products and technologies cannot be formed and mature within 5 years. In order to do a good job in the market segment, (but) its own product is immature, technology is not mature, if there is no guarantee of product quality, then talking about the brand is nothing.

LED will bring more added value to consumers. When you can provide more added value and services, the brand comes out naturally. When you talk about laptops, I think that in China, it must be Lenovo and not Samsung. But when it comes to mobile phones, it is definitely Samsung rather than Lenovo. This is the characteristic of market segments.