Ask e-commerce LED companies how to open the civilian market

[Source: LED Engineering magazine's "LED lighting channel" 2013 the third period (total of 39) reporter / Xiongyu Heng]

With the continuous expansion of LED lighting applications, many companies have put channel construction on the development agenda. During the "Single Day" last year, the domestic e-commerce leader Taobao.com's sales of 19.1 billion yuan, creating a myth of e-commerce sales, is staggering.

At the same time, engineering channels, dealer channels and terminal store channels are monopolized by traditional lighting companies, but many traditional lighting companies are less competitive in e-commerce channels, or even not involved, which also gives new LED companies Provides opportunities for development. Among the brands and sales volume of Taobao lighting industry, most of the brands in the forefront are unknown.

According to the statistics of relevant institutions, in December 2012, Oduo ranked first with a transaction volume of 78,331, surpassing the third place of Opto Lighting's 33,101, and the top ten turnovers were Odoo, Opp, Good Vision, Long Volume, Philips. , NVC, Donglian, Accord, Plydi, Edron. This also shows that the e-commerce channel has great potential, and newcomers are expected to compete with traditional channels.

In addition, coupled with the excessive construction cost of the terminal channel, the investment of millions of yuan has made many LED lighting companies discouraged. At the same time, with the increasing online shopping consumer groups, e-commerce channels are being valued by more and more lighting companies.

In recent years, well-known domestic lighting companies such as Tsinghua Tongfang, Sunshine Lighting and Op Lighting have begun to actively deploy their own e-commerce channels. How to use the e-commerce to open the LED civilian market has become a topic of common concern for domestic LED lighting companies.

E-commerce channel needs brand accumulation

Liu Shiquan, General Manager of Shenzhen Jinglaide Lighting Co., Ltd.


There are two main reasons why enterprises pay attention to e-commerce channels: First, the construction cost is low. At present, Jingdong Mall’s entry fee is 6,000 yuan/year, and the deposit is 50,000 yuan; Tmall’s resident fee is 20,000 yuan/year. The deposit of 100,000 yuan, which is a million yuan for the terminal construction costs, and the benefits are immediate.

However, the investment in e-commerce channels is not limited to this. In the latter stage, a large amount of advertising investment and the establishment of online brands are the key to the success of e-commerce. Entity sales require brand support, and e-commerce channels also require brand accumulation. At present, the sales of LED lighting products in the online shop are serious, and the price is relatively transparent. Enterprises want to stand out from the crowd and need to invest a lot of time and money to build their own brands.

Secondly, the online shopping consumer group is expanding, and the e-commerce channel prospects are promising. However, many companies that test water and electricity companies are not optimistic about the profitability. Up to now, the entire LED lighting industry, there is still a lack of strong brands, can not form a brand effect, enjoy the brand premium. At the same time, the entire market lacks supervision, and the price war has become a common means of competition for enterprises.

Open Taobao or Jingdong website, it can be seen that there are not a few stores that attract customers at low prices. Most of the lamps in these stores are assembled by themselves or from Zhongshan and Jiangmen. The quality is low and the cost is low, which has a huge impact on the regular LED manufacturers.

Due to cost constraints, the price of LED enterprise products is relatively high, and they are often at a disadvantage when participating in the competition of e-commerce platforms. The sales volume will not go up; if the low-cost method is adopted, the profit margin is limited, so the early stage enterprises should make plans for not making profits.

E-commerce channel is difficult to become mainstream in the short term

Yu Jing, Executive Vice President of Sichuan Xinli Light Source Co., Ltd.


E-commerce channels are very different from traditional engineering channels, dealer channels and specialty store channels. Due to the lack of intermediate links, the e-commerce channel has low marketing costs and great price advantages. Because of the difference in price, traditional lighting companies often have an impact on their traditional channels when expanding their e-commerce channels. Therefore, the traditional lighting companies have invested a lot of energy in the e-commerce channel.

At the same time, the current domestic LED lighting channels are mainly concentrated in the commercial and government engineering fields. Although the civil lighting market has grown significantly, it will take time to fully open the distance. The e-commerce channel directly faces the consumer terminal, resulting in a narrow customer base of e-commerce channels and limited market resources. Therefore, the e-commerce channel is difficult to become bigger and stronger in the short term, and the traditional lighting channel has become the mainstream.

The biggest advantage of the e-commerce channel is that it reduces the intermediate circulation of the product, reduces the marketing cost, and the low price meets the needs of the end consumers. Therefore, some civil channels will be replaced by e-commerce channels in the next few years.

The government mentioned in the previous "Semiconductor Energy-Efficient Lighting Industry Plan" that as of 2015, the domestic LED lighting market share should reach about 30%, and the home lighting market share should increase significantly in the next two years.

However, in the field of commercial lighting and engineering lighting, due to the urgent need for energy saving, the amount of replacement is large. However, engineering lighting is not price sensitive, they are concerned about the quality and performance of the product. At the same time, the lighting supplier is required to provide a series of services such as design, installation, commissioning and after-sales. This is the current e-commerce channel and cannot be satisfied at all.

The market environment is chaotic, price wars are on the rise, and the entire industrial environment is not optimistic. It can be said that the current LED lighting companies prefer e-commerce channels to the times. Because the price is relatively transparent, enterprises should completely separate the civil and engineering channels when constructing e-commerce channels, avoiding the feeling of price confusion in the minds of consumers, thus affecting their consumption judgment.

E-commerce channel is low price

Tan Jian, General Manager of Shenzhen Laiwei Photoelectric Co., Ltd.


E-commerce is about to become an important component of LED lighting channels and is an irreversible trend. However, because the current e-commerce channel is mainly limited to the civilian market, it is more sensitive to price. Enterprises can only rely on low-cost to gain profits, so only products with a large price advantage can be favored by consumers. There is no market for positioning high-end products on e-commerce platforms.

In the field of traditional lighting, the civilian market mainly takes the dealer channel. From provincial agents to municipal agents, regional agents to dealers, the intermediate links are cumbersome, resulting in a doubling of the ex-factory price of the products, and e-commerce eliminates these intermediaries. The price that reaches the consumer's hand is almost the price that the enterprise gives to the dealer. The LED price is close to the people, and the e-commerce is a good choice.

Due to the weak price advantage of some enterprises, they sing the channel of e-commerce. In fact, the e-commerce channel is a supplement to the company's sales channels. Although it is still in the early stage of development, it can also make profits through low-cost methods. It is especially important that the e-commerce platform is faced with ordinary consumers, which is beneficial to the establishment of a brand for enterprises, and saves large advertising costs for enterprises.

The channel for the civilian market is an agent, but the utilitarianism of the agent is very heavy. It is hoped that the profit will be immediate, and the e-commerce channel has a long profit cycle. Some agents do not value the e-commerce. As the main body of e-commerce promotion, if the company itself abandons the e-commerce channel, it will pin its hopes on the agent level. When the e-commerce channel is mature, the result will inevitably end in failure.

The e-commerce channel is aimed at the civil lighting market and does not conflict with the enterprise engineering channel. Although the consumer group is relatively narrow, the civilian market, as the market with the greatest potential for LED lighting, has not been fully developed. At present, in the terminal market, the price of LED products has been reduced to the extreme, and the profitability of enterprises is very limited. E-commerce may become a new profit growth point for enterprises.

The ideal e-commerce channel model is to combine agents and e-commerce channels into one, and establish a complete e-commerce sales network throughout the country. The whole network cooperates with offline sales, and sells in different places. The carrier of the service.

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